Warburg-HIH launches new retail fund

Hamburg-based real estate investment manager Warburg-HIH has launched a new German retail fund, which it intends to grow to €450m, Alexander Eggert, managing director product, business and fund management at Warburg-HIH, told REFIRE earlier this month.

The fund, Warburg-HIH Perspektive Einzelhandel: Fokus Nahversorgung, has already raised €100m and will focus on supply centres throughout Germany, according to Eggert: ‘We have identified more than 100 locations in Germany where we could invest,’ he said. ‘Whenever an opportunity comes up, we will look at the macro data and the micro location. Our target deal size is anywhere up to €55m, although the ‘sweet spot’ is €20m to €25m.’

Warburg-HIH has already acquired three supply centres under development in Hamburg, Halver and Usingen totaling 24,200 sqm. The centres are being developed by Hamburg-based developer Procom and are due to be completed later this year. Typical lease terms at the centres will average 15 years. Anchor tenants include German supermarket chains Edeka, Aldi and Rewe. Warburg-HIH also signed an agreement earlier this month to purchase a similar centre in Aachen, Eggert said.

However, the group is not interested in just acquiring supermarkets, Eggert emphasized. ‘We are after supply centres which have local dominance. Supply centres are a very different story to high street. You don’t typically get any of the main high street brands in supply centres.’

Increasing disposable income is fuelling demand in supply centres, Eggert said, noting that because Germany is not centralized ‘there are a lot of interesting cities outside the “Top 7”’.  

‘We’d like our new retail fund to be fully invested within 2 years. We’d like to grow it to €450m, including around 45% gearing.’ Investors in the fund include German pension funds, banks and Sparkassen (savings banks).

In recent months, Warburg-HIH has spent €340m across 11 retail transactions in Germany, including assets in Berlin, Hamburg and Dresden. Warburg-HIH, which is primarily a manager of AIFs in Germany, has around €6b of AUM.