Europe’s leading designer outlet village developer, owner and operator McArthurGlen and international investment management company Henderson Global Investors have teamed up to create what will initially be a €400 million European Outlet Mall Fund. Aimed at institutional investors, the fund is the first of its kind in Europe and has a target net total return averaging 13 per cent per annum over ten years.
The fund will initially invest in five of McArthurGlen’s European outlet villages in France, Holland, Austria and Italy, with options to acquire other outlets including the recently opened successful Castel Romano in Rome, Italy.
Principal investors in the fund are Mn Services NV (on behalf of two clients, Pensioenfonds Metaal en Techniek and Pensioenfonds TNO), Storebrand, Allianz, Sparkassenversicherung Baden-Wuerttemberg AG and Tamweelview S.A.
In addition, Henderson and McArthurGlen are co-investors in the fund. The fund will be geared through the €270 million facility that has been agreed with Hypo Real Estate Bank International.
McArthurGlen Chairman, J. W. Kaempfer, said, “McArthurGlen has previously sold interests in the seven UK outlets it developed. Each time we have retained a meaningful ownership stake as well as long-term management of the centres.
´This fund is effectively five more sales, accomplished all at once and a clear indication of the investment community’s confidence in the quality end of the designer outlet retail sector and in our company’s management expertise. Of course, it also demonstrates McArthurGlen’s continued commitment to developing across Europe. We believe this is an extremely attractive opportunity for investors.”
Although the UK market - the upper end of which McArthurGlen dominates - is mature and growth has slowed, Europe has seen an increase in planning applications for designer outlet malls. Retail experts believe that the strongest and most talented developers, with a head start in the market, will capitalise on this growth.
Neil Varnham, Director of Property, Retail (Europe) at Henderson Global Investors, said, “As the first Outlet Mall Fund in Continental Europe this is a rare opportunity for investors to access a European property portfolio specialising in a growing sector of the retail market which has traditionally been difficult for investors to access.
´There are few direct investment opportunities which offer such scale and geographical diversity as this fund with such attractive return prospects managed by the acknowledged industry leaders.”
Henderson Global Investors is the fund manager with responsibility for the strategic management, performance and administration of the fund. Henderson has substantial expertise in the general retail property sector.
It is also a joint venture partner in the Birmingham Alliance, developer of the Bullring, Europe’s largest regeneration project. Henderson is also the fund manager of the €1.2 billion Henderson UK Retail Warehouse Fund which currently has over 18 successful assets.
McArthurGlen has been appointed for the life of the fund as property and asset managers for each of the centres - a key criteria in the fund’s structure.
The company’s track record of developing and operating Europe’s largest and most successful outlet villages is unmatched. McArthurGlen is credited with bringing the US concept to the UK and successfully introducing it to Europe.