Henderson funds to buy mainland, German property

MUNICH: Fund manager Henderson plans to raise some US$900 million (RM2.78 billion) to buy malls on the mainland and in Germany, as robust growth in the two economic powerhouses boosts domestic spending, the company's head of global property says.

"We're looking at areas that are going through continued GDP growth ... so we like particularly German retail properties," said James Darkins, who oversees Henderson Global Investors' property businesses in Britain, Europe, North America and Asia.

"The other market we particularly like is China, and we are currently looking to bring offshore institutional investors into grocery-anchored retail developments, mostly in third- and fourth-tier cities," he said on Monday, Oct 4 on the sidelines of the Expo property conference in Munich.

Mainland gross domestic product is expected to rise 9.5% this year, up from 9.1% last year, while the German economy, Europe's largest, could grow by a record 3.6% this year, forecasts show.

The Henderson German Retail Income Fund has a target size of €300 million (RM1.28 billion) including debt, and will acquire dominant retail warehouses and neighbourhood centres.

"The German consumer never reached the same heights of indebtedness seen elsewhere in Europe, particularly the UK, and they have very stable spending patterns. And stable and predictable is good, in times of uncertainty," Darkins said.

The unnamed mainland retail property fund, Henderson's first focused solely on property in the country, will mainly be sold to European and Middle Eastern institutional investors, and is targeting a fund size of US$500 million.

"The strategy we're looking at in China is very much looking at what's going on in the domestic market there and seeking to invest in that growth, which we see as a very long-term theme."

The fund manager also had about €1 billion across its funds for investing in Europe, and in addition to the core markets of Britain, France and Germany, would also look to "cherry pick" assets in Spain, Italy and the Benelux region of Belgium, the Netherlands, and Luxembourg, he said.

Henderson is also keen to buy assets from troubled German open-ended property funds such as those operated by the KanAm Group, Aberdeen Immobilien and Morgan Stanley, which are under pressure to liquidate and repay investors. — Reuters