Aberdeen Property Investors has announced the launch of a new European Shopping Fund for international institutional investors. The fund, Aberdeen European Shopping Property Fund, is structured as a closed ended fund with a defined term of 10 years. It will use Aberdeen's collective experience and capacity throughout Europe to build a diversified retail portfolio with moderate gearing in markets offering strong return prospects.
The Fund made its first acquisition in September and currently holds a portfolio of 150 unit shops in inner city locations across the Netherlands at a value of 124 million (incl. acquisition costs).
The aim is to achieve a return on equity for the investor of above 9% p.a. (net of fees and after leverage) which includes a relatively high cash return of 5% p.a.
The Fund can invest across the whole of Continental Europe, in unit shops, shopping centres and retail warehousing. Initially, the focus will be on the North West of Europe including Belgium, France, the Netherlands and Germany. However, other areas such as the Nordic markets will be considered as opportunities arise.
The target investment volume is €1 billion by the end of 2009.The subscription period for shares is now open for up to 36 months, with the first closing set for the beginning of 2007. During the investment period the Fund will have maximum gearing of 65% of gross asset value but the long-term objective is around 50%.
Nico Tates, Fund Manager, Aberdeen European Shopping Property Fund, commented: "There is tough competition to complete good deals in real estate investments in all sectors in Europe, but I'm convinced that our fund management team, in cooperation with our Aberdeen retail experts on the ground, will allow us to identifying good investment opportunities, complete transactions and actively manage the properties in order to generate premium fund returns for investors."
Aberdeen already manages 40 shopping centers to a value of €1.3 billion throughout Europe and will build on that unique experience to support this new fund.