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ECE Real Estate Partners launches new preferred equity fund

Real estate investment manager ECE Real Estate Partners has set up a new preferred equity fund backed by a portfolio of three German neighbourhood shopping centres with a market value in excess of EUR 500 million.

The new “ECE Preferred Equity Fund” (EPEF) has secured capital commitments of more than EUR 100 million from institutional investors. In addition, ECE Real Estate Partners has issued a EUR 100 million bond to finance the acquisition of the portfolio. Strong alignment of interest has been secured by the Otto Family acting as an investor in the common equity piece of this structured transaction.

EPEF is targeted at long-term investors striving for high income and regular distributions but also seek downside protection in a market which is attractively priced but still undergoing structural changes. With the successful issuance of its first bond and its first preferred equity fund, ECE Real Estate Partners has significantly extended its product range as an investment manager.

Including Linden-Center Berlin, Hallen am Borsigturm Berlin, and Marstall Ludwigsburg, the portfolio comprises three German neighbourhood centres with a total leasable area of 125.000 sq m and 270 shop units, attracting more than 17 million visitors annually. The assets were owned by the ECE European Prime Shopping Centre Fund, a closed ended value-add fund that in the course of the past years invested extensively in the modernization, expansion and value creation of the centres.

“During the recent months, with a significant offering of everyday necessities the three centres have impressively demonstrated the resilience of neighbourhood retail destinations as an asset class. Our bond has received an investment grade rating, underlining the high quality of the portfolio”, says Dr. Volker Kraft, Managing Partner of ECE Real Estate Partners.

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