Prelios preparing first German retail fund
Listed Italian real estate firm Prelios is preparing to launch its first German fund, a closed end Luxembourg vehicle focused on core-plus retail investments. It is looking to raise €280m from German and international institutional investors, while it will also offer a separate-account arm with a German focus to investors.
REFIRE met with Prelios Germany head Martin Mörl and head of investment Nico Tates recently to learn more about the company's ramping-up of its Germany operations, including the opening of a new Frankfurt office earlier this year. The group is beefing up its German team to provide fund management and separate account management services for third-party investors who are seeking exposure to the German market, but don't have their own platform.
Tates, working out of Frankfurt, said that Prelios has also just appointed Gregor Böhme as head of acquisitions from the Frankfurt office. Böhme is a lawyer and has previously worked for Morgan Stanley Real Estate Funds, DIC Asset and Immofinanz.
The new fund, the Prelios German Retail Property Fund Germany, will pursue a core-plus strategy with a maximum loan-to-value of 40%, focusing on inner-city and out-of-town retail assets including shopping centres, Fachmarktzentren, department stores and high-street retail units with a value of €20m per unit upwards. Target locations will be Berlin and western German cities with a catchment area of at least 100,000 people. The fund will have leveraging of 35-40%.
On the fund's strategy, Tates said, "Prelios will pursue a core-plus investment strategy for the fund. That means we will exclusively invest in underperforming properties with upside potential. We plan to invest whenever we identify significant value-add potential through optimisation and repositioning."
Prelios, which emerged out of the old Pirelli Real Estate, has strong form in German retail after nearly a decade of experience in Germany, including concluding transactions of about €3.6bn between 2009 and 2015 alone. Its parent company in Milan runds 29 funds in Italy with more than €3.5bn of assets under management. In Germany, Prelios Immobilien Management handles nearly €2bn of retail assets across the country.
Prelios completed a strategic restructuring and re-focusing of its investment objectives last year. In December Andrea Boeri, the Italy-based co-head of the German operations with Mörl, said: "Prelios's goal is to offer investors attractive value-added opportunities and yields, particularly in retail real estate, where we have acknowledged expertise in re-positioning and turning around inner-city shopping centres. We also want to increasingly offer our management services for commercial properties to third partes in areas such as the centre and the south of Germany.