Union Investment and REDOS are launching a 鈧�500m institutional fund targeting large-scale retail property in Germany.
The joint venture has raised 鈧�250m for the new REDOS Einzelhandel Deutschland fund, which is aimed at pension funds, superannuation schemes, banks and insurance companies.
REDOS, which has a 鈧�1.1bn portfolio of 77 German retail properties, will be fund manager and asset manager for the joint venture. Union Investment will provide fund administration through its Service-KAG business. The companies will manage investor accounts jointly.
Large-scale superstores and hypermarkets, as well as in retail warehouses, are being targeted by the fund.
The two companies said that four properties worth 鈧�50m have so far been bought for the new joint venture. A further 鈧�70m of properties are 鈥渁lmost signature-ready鈥� they said.
鈥淭he investments will concentrate on selected sites characterised by high purchasing power and centrality,鈥� said REDOS managing director Oliver Herrmann, who highlighted the benefit of planning restrictions.
鈥淢unicipal governments rarely ever zone new sites for large-scale retail units,鈥� he said. 鈥淭he licensing practice is highly restrictive.鈥�
This, said Herrmann, makes existing properties 鈥減articularly interesting for institutional investors with a focus on core properties鈥�.
REDOS recently worked with Morgan Stanley鈥檚 MSREF funds, buying the Christie retail portfolio from M&G.
