MIPIM 2010: ECE plans €500m shopping centre fund

The large European property company best known for prime urban mall development, management and ownership, is considering raising capital from institutional investors for a private equity-style vehicle.

ECE, the European property company best known for prime urban shopping centre projects, is approaching potential investors over a planned private equity-style fund.

The company, which is exhibiting in Cannes this week at the MIPIM property show, is understood to be targeting a capital raise of around €500 million ($688 million) for a European retail fund that will concentrate on the aquisition of retail assets in large city locations.

According to market sources, it is likely to insert some pre specified assets in Germany and Poland into the planned vehicle as well as new investments as they are made.

Hamburg-based ECE is a long-established property company founded in 1965 by Werner Otto, the well known entrepreneur from the region.

It employs approximately 3,000 staff and has 114 shopping centres under management across Europe with a concentration in Germany.

Despite the credit constrained market, it has recently been able to secure financing for one of its latest projects in Poland.

The real estate finance business division of Landesbank Berlin and BerlinHyp have agreed to provide €111 million for the Galeria Kaskada, according to an announcement made earlier this month.

Other firms are also planning core strategy real estate funds for Europe currently. Yesterday, ING Real Estate Investment Management said it had launched a pan European shopping centre fund.

That announcement was designed to coincide with the MIPIM property show where current investors in ING property funds have descended for the week.

Indeed, core property fund raises seem to be in vogue currently with fund managers believing many investors are seeking lower risk vehicles.

Real estate website Property EU reports today that AEW Europe is seeking to raise €300 million for a fund targeting core properties across Europe.