Hahn Group launches follow-up €500m German retail fund

The German retail property specialist Hahn Group is setting up its second retail Spezialfonds for institutional investors, with the Hahn German Retail Fund II targeting a volume of €500m, of which €250 will be equity.

Like its predecessor, which was designed as a Luxembourg vehicle, the fund is aimed at saving banks, pension funds, foundations and retirement funds with a minimum subscription of €10 million. The core-plus fund is targeting an IRR return of 6%, investing in large retail assets, such as retail warehouses, superstores or DIY stores across the country

Hahn's first Retail Fund (Hahn FCP-FIS German Retail Fund I) has been fully invested since the end of 2015 with a gross volume of around €650mn. The average total return over the past five years was 6.8%, according to Hahn. This would have outperformed the MSCI benchmark index SFIX German Retail by 2.9%.

According to CEO Michael Hahn, “With the new Hahn German Retail Fund II we want to tie in seamlessly with that success. We plan to invest primarily in core-plus properties and established and future oriented locations. The wide range of possible investments goes from the 'as good as new' and long-term leased core real estate to the value-add property with short remaining terms of the lease”

Fellow board member Thomas Kuhlmann said the company was already in advanced negotiations on several deals, and that an investor group has already signalled interest in the fund. “We expect to be able to carry out the first closing for the open-end fund in fourth quarter 2016,” he said.

Based in Bergisch-Gladbach near Cologne, the Hahn Group has more than €2.4bn of assets under management.