Henderson joins with Palmira for German logistics Spezialfonds

The German Spezialfonds funds structure continues to gain in popularity among institutional investors, particularly since the since the well-publicised troubles in the open-ended funds structure led to reform of fund legislation designed to differentiate between the needs of private and institutional investors.

The latest company to reach for the Spezialfonds structure is Henderson Global Investors, whose German property arm is raising €250m for a German logistics property fund in collaboration with logistics specialist Palmira Capital Partners. The eight-year product will aim for an 8.5% annual return for German and Austrian institutional investors, using a 40% gearing provision.

Henderson does, however, already have experience with Spezialfonds, and had its final close last year on its first Spezialfonds – the Henderson German Retail Income Fund – which has already made five acquisitions.

The new logistics fund will invest in “existing, good quality logistic assets in top locations throughout Germany”. These will include Stuttgart, Bremen, Hamburg, Munich, Frankfurt, Düsseldort and Cologne, where a seed portfolio has already been identified – with the first deals imminent.

Thorsten Kiel, fund manager, described the fund’s opportunity as “a relatively untapped sector in a niche but maturing asset class”. Henderson’s head of German property Tim Horrocks added, “: "The strategy for the Fund involves the acquisition of existing, proven schemes with secured leases already in place. This means that we retain the benefit of the low risk associated with newer build assets but avoid the premium pricing."

As with previous Henderson funds, the launch of the new logistics fund is supported by Service KAG IntReal International Real Estate Kapitalanlagegesellschaft mbH, a wholly-owned subsidiary of Henderson’s German joint venture, Warburg-Henderson, which will also handle the fund administration.

Meanwhile, Henderson rival Invesco predicted recently in its first-quarter report on European property that direct property investors would “remain risk-averse for 2012 and continue to focus on a narrow definition of prime assets” - continuing a trend evident over most of the past 18 months, before taking on more risk in early 2013.

Secure income and liquidity will be two key attributes for real estate investments, as well as an avoidance of weaker peripheral markets, liquid markets attracting various sources - geographies and investor types - of capital, and property in ‘key gateway centres', Invesco said.  It forecast that Germany overall would “continue to outperform on a relative basis.”