Greenman buys €70m German retail for Mid-Eastern investors
Greenman Investments, the Dublin-based specialist for German retail, got a good kick-start for its latest German retail property fund raising commitments from private investors based in the Middle East. The Greenman IncomePRO fund, set up last year, is a co-operation between Greenman Investments and RiverCrossing, an investment firm focused on Islamic-compliant investments.
IncomePRO is Greenman’s third fund under Luxembourg law after “Retail+” and “IncomeOne”. It has now raised €31m in its first close, with the commitments coming from RiverCrossing’s network of family offices and Middle Eastern high net worth individuals. The money will be used to acquire three German retail properties in core-plus and value-add categories, with the total investment amounting to €70m.
Asim Zafar, CEO at RiverCrossing, said: "Greenman funds offer our investors the opportunity to invest in retail properties in Europe’s strongest economy and to generate attractive ongoing returns. We are confident that this is the first of several deals between Greenman and ourselves."
REFIRE met with Greenman's CEO John Wilkinson at the recent MIPIM just before the company announced the River Crossing deal. Greenman has been steadily gaining commitments from German, Irish and Luxembourg investors and, with an AIFM license, has been actively courting a broader investor base in other EU countries and the Middle East.
Wilkinson said that Greenman had locked in an acquisition pipeline of €141m for the first half of this year, along with a further extended pipeline of another €200m. The first tranche is for eight retail properties located throughout Germany, and rented out to household-name retailers, like Greenman's other portfolios.
“We will continue to consistently pursue our strategy of growth in 2016", said Wilkinson. "The locked-in properties are characterised by stable long term cash-flows with excellent anchor tenants, in line with our core plus strategy. The low interest rate environment makes our funds very cash-attractive to investors. Appetite for investment in our funds has increased in 2016 partly due to our ability to generate between 5% to 6% cash on cash returns per annum.”
In 2015, Greenman doubled its assets under management to €279 million. “With our regulatory framework and the strong fundamentals of our asset class we are confident that we can increase our fund raising in 2016”, Wilkinson said.