SEB Immobilien-Investment GmbH has secured an 85% majority interest in a total of nine neighbourhood shopping centers in the US states of Maryland, Virginia and New Jersey for around US $200 million (ca. €139 mln). The remaining 15% for the equivalent of around US $35 million (ca. €24 mln) and center management operations will remain with Kimco Realty Corporation, a REIT specializing in shopping centers. Kimco is publicly traded on the NYSE under the symbol KIM and included in the S&P 500 index.
Six of the centers are located in the Greater Baltimore area (metropolitan statistical area, MSA), two near Richmond (Virginia) and one property in the US state of New Jersey in the Greater Philadelphia area. The majority of these are 'infill locations', which are characterized by their pronounced density of development. The retail portfolio comprising a total of around 112,200 m² has an average letting rate of 97.4%. The main tenants are American grocery store chains such as Harris Teeter, Safeway and Giant Food, as well as department stores such as Kohl's or Marshalls, plus various smaller shops. Neighbourhood shopping centers provide neighbourhoods with everyday food and goods, but not luxury products.
The real estate package supplements the portfolio of the SEB Global Property Fund, a mutual fund launched in 2006 (ISIN: DE000SEB1A96).
"Neighbourhood shopping centers have established themselves as high-yield real estate investments that are comparatively stable in economic terms," said Choy-Soon Chua, Managing Director of SEB Immobilien-Investment GmbH. In addition to the continuous cash flow returns, it is above all the diversification effects that are an advantage for the classic type of US retail property.
For SEB, the partnership with Kimco seamlessly follows the joint venture agreements already signed with US partners such as Paradigm. SEB Asset Management AG's real estate investment company partnered with the developer and manager of student residences in 2005 to enter the student housing market, a new segment for open-ended real estate funds.
Joint venture structures with experienced market players such as Kimco or Paradigm not only give SEB optimum access to new and attractive market niches, "they also reduce the risk of a sole investment", as Managing Director Choy-Soon Chua explained.