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TIAA Henderson Real Estate restructures Outlet Mall Fund

TIAA Henderson Real Estate (TH Real Estate) has secured a 10 year extension for its c.€1.5 billion flagship Outlet Mall Fund.

TIAA Henderson Real Estate (TH Real Estate) has secured a 10 year extension for its c.€1.5 billion flagship Outlet Mall Fund. The original Fund, which expired in February this year, following a ten year life, has been restructured into a new Fund - the European Outlet Mall Fund. In total, c. 80% of unit holders elected to continue with their investment into the new vehicle, which has a new term until 2024.

Additional equity was raised from existing investors in order to redeem those investors who wanted to exit the Fund. In total €260 million was raised. Remaining equity will be used for cap-ex projects across the portfolio. An additional €100 million is waiting to be committed.

TH Real Estate will be the Investment Manager of the Fund which will continue its successful partnership with McArthurGlen. McArthurGlen manages all asset across the existing portfolio, including strategic planning, leasing, marketing, development and day-to-day management.

Investors comprise a range of pan-European institutional clients, including both McArthurGlen and TH Real Estate themselves.

The Fund owns 8 outlet mall assets across Europe, in addition to its indirect holding in three UK outlet mall assets via its investment into TH Real Estate’s UK Outlet Mall Partnership. Recent activity includes a further extension at the Barberino Designer Outlet in Tuscany, Italy which added more than 5,000 sq m of gross leasable area to bring the total amount of retail space at the centre to around 27,000 sq m, comprising, 130 stores.

Andrew Rich, Fund Manager, TH Real Estate, said: “The Outlet Mall Fund, which was brought to the market in 2004, did not provide an option for an extension. We worked collaboratively with our investors to explore all possible routes, before determining that a restructure was the optimum outcome. It allowed redeeming investors to exit while creating a new vehicle for the majority of the investors who remained committed to the investment strategy. By initiating an open and transparent voting process, we were able to provide a solution that met the needs of all invested parties.

Designer outlets have been one of the strongest performing retail sectors across Europe over the past decade. The Outlet Mall Fund had an outstanding track record, having delivered c.12% IRR per annum to investors since its inception in 2004. I’m confident that the new Fund will continue to provide a strong investment for our clients. We continue to explore development opportunities with McArthurGlen across the existing portfolio and will also be seeking new investment opportunities as we look to further strengthen the European portfolio.” 

 

Disclaimer
Issued by Henderson Real Estate Asset Management Limited, 201 Bishopsgate, EC2M 3BN. Authorised and regulated by the Financial Conduct Authority.

TH Real Estate is a name under which Henderson Real Estate Asset Management Limited provides investment products and services.

Past performance is not a guide to future returns. The value of investments and any income will fluctuate (this may be partly be the result of exchange rate fluctuation) and investors may not get back the full amount invested. Where opinions have been expressed, they are based on current market conditions and are subject to change without notice.

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