Arbireo launches grocery real estate Spezialfonds, targets €200m

German property investment manager Arbireo Capital is launching the first German Spezial-AIF (Spezialfonds) focused on the grocery retail sector for institutional investors. The fund is targeting €200m volume and a dividend yield of at least 6%. Arbireo said it had equity capital commitments from two German insurance companies of €120m to get the fund rolling.

To seed the portfolio, the “Arbireo Spezial-AIF Lebensmittel-Einzelhandel” has already bought 15 grocery retail properties for €40m from Ratisbona Group, the market leader in Germany for building grocery retail stores, and the two parties have agreed on a longer-term co-operation – in essence, with Ratisbona feeding the fund with turnkey projects from its pipeline.

All the initial assets in the fund are leased long-term to well-known retailers. Under the terms of the deal, Arbireo has also committed to investing a further €80m in additional retail properties with remaining lease durations for at least eight years. In return, Ratisbona must offer at least 35 properties to the fund annually with 15-year leases, which Arbireo may, but is not obliged to, buy – while Ratisbona is free to collaborate with other investors.

Behind the two companies are well-known old hands from the German real estate scene. Jürgen Kelber of Arbireo was the boss of residential privatisation specialist Alt & Kelber for many years, and became a board member at Austria's conwert Immobilien when conwert took over his company.

Rudolf Schels is the founder of grocery discounter Netto, and set up Ratisbona in 1987 to service the discounter's real estate needs. It has since built about 1,100 stores. Ratisbona was advised on the deal with Arbireo by Nexus Capital Advisors, headed by Martin Braun and a number of colleagues from the ex-Cushman and Wakefield investment advisory team in Frankfurt.