Tuesday 12 December 2017

Germany's biggest pension fund targets Dublin retail

BVK has a €1.3bn war chest for prime high-street retail assets across Europe
BVK has a €1.3bn war chest for prime high-street retail assets across Europe
Sarah McCabe

Sarah McCabe

Retail investments on Dublin's Grafton and Henry Street are the number one priority for a new €1.3bn retail investment programme set up by Germany's biggest pension scheme provider.

Hines, the US-headquartered international real estate firm, has been selected by Bayerische Versorgungskammer (BVK) to execute a €1.3bn war chest targeting prime high street retail assets across Europe.

BVK is Germany's is largest pension scheme group with approximately €62bn assets under management.

Hines is one of post-recession Ireland's most prolific investors. It is currently developing a vast residential, retail and office hub in the south Dublin suburb Cherrywood. It was one of the underbidders in the sale of loans attached to Dundrum Town Centre, which ultimately went to Hammerson and Allianz.

Hines has identified cities across 20 countries in Europe where BVK will buy retail sites. These include London, Paris and Munich as well as Dublin.

"Our research shows that Dublin retail is the highest priority in Europe in terms of potential returns" said Brian Moran, Hines Ireland's senior managing director.

"Grafton Street, Henry Street and surrounding precincts are key targets."

The search has already begun in Ireland, though no deals have yet been completed.

The majority of investments will be held long term, for 10 years or more. Sites that need to be revamped or redeveloped will be targeted, Moran added.

Many European retail properties were starved of investment during and after the global financial crisis and thus need work.

"As habits change with the growth of online shopping, brands are asking for bigger stores to display their entire catalogues so that the customer can feel the product, even if the final purchase is online" he said.

Hines completed the fund's first purchase at the end of last year, acquiring an iconic building on Oslo's Karl Johans gate, one of the most sought after retail precincts in Norway.

The 5,100sqm building was secured as a sale and leaseback from Landkreditt Bank for a sum of €52m.

Sunday Indo Business

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