After five residential real estate funds and one office real estate fund, Deutsche Investment KVG is going live with its first investment fund in the food retail asset class. Named “Deutsche Investment – Food Retail I,” the fund is structured as an open-ended real estate special AIF. The planned investment volume of EUR 300 million is intended for commitments in sustainable and forward-looking grocery retail locations. The net cash-on-cash yield targeted on the top fund levelaverages 5.25% – 5.50% p.a. The first investors have already been signed up. At this time, the fund is in its sales phase.
The investment strategy of the “Deutsche Investment – Food Retail I” fund seeks to build up a diversified retail property portfolio with focus on food markets (discounters and full-line grocers) and grocery-anchored retail parks in structurally stable regions of Germany. The focus is on towns of more than 3,000 residents with a bright outlook. The first investment property acquired for the fund’s portfolio is a combination hypermarket in Neuenkirchen-Vörden, a town in Lower Saxony, anchored by a high-net-worth tenant, Bünting Group. The next acquisitions have progressed to an advanced stage, and are expected to be notarised in May.
The transaction, asset and property management is to be handled by DIR Deutsche Investment Retail GmbH. The fund team, headed by Managing Director Susanne Klaussner, boasts an extensive track record, long-term experience and an in-depth understanding of the local amenities segment, the emphasis being on basic supply.
“Due to its long-term leases with high net worth tenants and its stable rental yields, food retailing represents an attractive and sustainable investment product for institutional investors. Especially in the current crisis situation, it becomes readily apparent that resupplying the population via the in-store food retailing segment plays a key role in Germany, and that this segment is clearly more resilient against the online competition than other retail segments,” said Susanne Klaussner, Managing Director of DIR Deutsche Investment Retail GmbH.
“In addition to the favourable parameters of its market segment for investors, the new fund is made particularly attractive by the market access of Deutsche Investment,” added Enver Büyükarslan, Partner of Deutsche Investment KVG. “Our shareholder structure allows us to acquire strategy-compliant assets for the fund any time. This way, investors can buy into the fund on short notice and without having to wait long until their funds are called.” The fund specifies a minimum subscription amount of EUR 10 million and aims for a gearing ratio (LtV) of around 45 percent.