Scottish Widows Investment Partnership (SWIP) and Cushman & Wakefield Investors (CWI) are planning to launch a diversified pan European urban retail property fund, PURetail, aimed at institutional investors. The fund's focus will be to capitalise on investment performance generated by the core strengths of city centres across Europe and their growing importance for retailers.
Due to be registered in Luxembourg the PURetail fund will be launched, via a private placement offering, to sophisticated institutional investors in the UK and other continental European countries. A first closing is anticipated during Q1 2010.
SWIP and CWI believe there are many factors that come together to make this fund a compelling opportunity for institutional investors. Not least is the partnering of SWIP and CWI, combining a global fund manager's proven track record in the property sector with the skills, experience and market access of a leading global asset manager. The fund will provide investors with diversified exposure to the urban retail sector, which has traditionally been under represented in their sector allocation, and represents a less volatile asset class.
SWIP and CWI believe that the investment period starting in 2010 will present increased opportunities in the UK and in continental Europe as pricing becomes more attractive and stability returns to the capital markets.
Robert Matthews, Head of International Property and Strategy, at SWIP said: “A growing focus on in-town shopping has increased the attractiveness of major European city centres for retailers. Investors recognise the attractiveness of the sector but historically inner city retail has been a difficult market to access, with the need for strong local market contacts to source and manage stock being essential. As a result, many investors are underweight in this element of the retail sector. With its impressive local knowledge and reach, CWI was SWIP's natural partner for this fund.”
David Rendall, European CEO Cushman & Wakefield Investors said: “Demographic change is resulting in increased population density and driving economic growth in inner city areas, reinforcing the attractiveness of town centres to retailers. Our urban retail property fund will have a differentiated investment strategy, buying well located retail property in supply-constrained cities and town centres, identified by the combined research capabilities of our respective organisations.
“Cushman & Wakefield's brand is synonymous with the retail property sector and, as its independent investment manager, CWI is uniquely placed to leverage off its intimate market knowledge, which will give the PURetail fund a competitive edge. SWIP is a leading real estate fund manager, working with them to create the platform to deliver this fund to investors is a tremendous opportunity for CWI."
Robert Matthews continues: “Diversity is key with this investment approach, which has received strong positive feedback from prospective investors. The fund is expected to have a three year investment period, meaning that we can capitalise on the differing economic cycles across continental Europe and the UK, creating a range of different buying opportunities in a repriced real estate market.”
The fund is subject to regulatory approval and is planned to be a Luxembourg FCP-SIF.
