Morley Fund Management, Europe’s largest property fund manager* today launched the German Retail Investment Property Fund (GRIP).
Morley Fund Management, Europe’s largest property fund manager* today launched the German Retail Investment Property Fund (GRIP).
The GRIP Fund is to be run in partnership with SachsenFonds Asset Management GmbH. SachsenFonds will be responsible for asset management and Morley for fund management. This follows the successful co-operation on the Aviva Central European Property Fund where Morley and SachsenFonds perform similar roles.
Ben Stirling the fund manager who heads up Morley’s European property team believes Germany is set for an economic recovery, and the GRIP Fund is poised to take advantage of it.
“We believe that the German economy will continue to recover over the coming years, and there will be opportunities to acquire retail property at attractive prices. With SachsenFonds we know we have a strong partner who has an intimate knowledge of German property markets.
“We have already secured a seed portfolio for the fund and have assembled a strong pipeline of opportunities which we expect to close over the next few months. We are looking very carefully at the quality of the assets and aware that there are a lot of factors to take account of including regional differences throughout the country.”
Stefan Pfisterer, head of institutional funds at SachsenFonds, said: “We are delighted to extend our business relationship with Morley, and to do this in our German home market makes us even prouder. We believe that the German retail market, although generating increasing international interest, still offers value for money.”
The fund will acquire a portfolio of retail properties located across Germany over a three year investment period and will aim to deliver a minimum investor IRR (post fees, taxes and gearing) of at least 10.0% per annum over its life, with a minimum “cash on cash” yield of 7.5%-8.5% per annum after the investment period.
The GRIP Fund is aimed at institutional investors with a minimum €3 million investment. The objective is to raise €120 million of equity and €180 million of debt (60% loan to value) to create a total fund (initial Gross Asset Value - GAV) of €300 million. Some €60 million of commitments have already been raised and further equity commitment will be sought in the latter part of 2006.
Morley revealed plans to invest Ł1 billion in continental European property two years ago. Since then it has invested Ł1.2 billion and now has a team of 10 people dedicated to European property.
If there is excess demand for the GRIP Fund then Morley has the discretion to increase the fund’s size to €400 million by raising an additional €40 million of equity. The fund has a planned life of 10 years and will be a Luxembourg FCP (Fonds Commun de Placement)**.
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* Oxford Property Consultants, December 2005.
** The fund will be an unregulated collective investment scheme for the purpose of the UK Financial Services and Markets Act. Investment into the Fund will therefore be available only to intermediate customers and to those to whom the scheme can be promoted under the Act. As this will be an unregulated collective investment scheme all or most of the protections provided by the UK regulatory system do not apply and compensation under the Financial Services Compensation Scheme will not be available.
For further information please contact
Strahan Wallis, Corporate Communications, Morley Fund Management, telephone: 020 7809 8618
Awards
- 2006, Property Fund Manager of the Year, Pensions Management Awards
- 2006, Property Fund Manager of the Year, Property Week Awards
- 2006, Outstanding Company of the Year Award, CEE Real Estate Quality Awards
- 2006, Investor of the Year Award, CEE Real Estate Quality Awards
- 2005, UK Pensions Awards Property Manager of the Year
- 2004, Property Week Fund Manager of the Year Award
- 2003, Property Fund Manager of the Year, Pensions Management Awards
The Morley property team consists of over 70 investment professionals and manages a range of funds on behalf of institutional, pension and retail clients. Morley has been at the forefront of innovation in property fund management and has launched eleven specialist sector based funds with partners, including: Igloo Regeneration Fund, Quercus Healthcare Property, The Junction and The Mall.
Further information about Morley Fund Management can be found at www.morleyfm.com or www.morleyproperty.com