CBRE GI launches follow-on ESCF fund

CBRE Global Investors has launched the closed-ended European Shopping Centre Fund II, which will buy dominant retail centres on the Continent.

The eight-year fund will buy core-plus investments with opportunities to enhance income, continuing the investment strategy of the CBRE European Shopping Centre Fund, which has agreed it final investments.

Florencio Beccar, the fund’s manager and head of retail, said: “We are seeking to raise €500m of equity capital and to hold a €100m-€200m first closing before the end of the year.

“Many of the investors in the first fund are considering going into the second. They are mainly European investors, but we expect to have some Asian and US investors this time, which we weren’t able to do in fund 1.”

ESCF II is targeting a net 11-13% internal rate of return and plans to deploy leverage up to a maximum of 50%.

“Today, leverage is doing what it is supposed to do,” said Beccar. “You can obtain nice spreads on debt finance below net yields on the assets.”

The second fund’s target countries for investments are Germany, France, Sweden, Finland, Belgium, Poland, the Czech Republic, Spain, Italy and Portugal, and the invest-ment period will be four years.

The last two investments for ESCF I, in Sweden and Poland, will be completed later this month, when the fund will have a €700m portfolio.

ESCF has bought several investments from investment managers liquidating funds, such as Matrix and Credit Suisse.