ECE Real Estate Partners launches new preferred equity fund

Luxembourg-based investment manager ECE Real Estate Partners has launched a new preferred equity fund, targeting shopping centres.

The ECE Preferred Equity Fund (EPEF) said it has so far secured capital commitments of more than €100m from institutional investors, and also issued a €100m bond to finance the deal. It targets long-term investors seeking high income, regular distributions and downside protection in a market undergoing structural changes, according to its prospectus. The Otto family, majority owners of Hamburg-based ECE, are known to be supporting the investment.

The fund is seeded by the acquisition of three German shopping centres, with a market value of more than €500m. The centres are the Linden-Center Berlin, Hallen am Borsigturm Berlin, and Marstall Ludwigsburg (near Stuttgart), with together 270 shop units and 125,000 sqm, attracting more than 17m visitors annually. The centres were previously owned by the ECE European Prime Shopping Centre Fund, a closed-ended value add fund that has invested in substantial refurbishment in the centres.

Volker Kraft, managing partner of ECE, said: 'During the recent months, with a significant offering of everyday necessities the three centres have impressively demonstrated the resilience of neighbourhood retail destinations as an asset class. Our bond has received an investment grade rating, underlining the high quality of the portfolio.'