Cordea Savills to float German property fund on LSE

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The Independent Online

Cordea Savills, the fund management arm of the estate agent Savills, plans the first flotation of a German property fund on the London Stock Exchange at the end of June.

Cordea's vehicle will be the only fund specialising in German commercial property listed on the LSE's main market and will give investors access to Europe's largest property market. Other international real estate investors such as the London-based private equity firm Terra Firma are piling into German property in the hope that the market will pick up after years of lagging returns.

Germany has underperformed every other European property market since 2000. In a sign that the country is becoming more attractive to international investors, cross-border investments rose 13 per cent last year, up from 5 per cent the previous year.

Humphrey Price, the chairman of the Cordea Savills German property fund, which will raise £160m in the flotation, said: "Having recently underperformed many of the property markets in western Europe, German real estate fundamentals, characterised by relatively high rental yields, now offer extremely attractive opportunities for investors, particularly in the retail sector."

The fund has already secured a €198m portfolio of 10 retail assets spread across four German states and is in negotiations on a further €400m of assets. It plans to assemble a €600m portfolio of retail assets - supermarkets, shopping centres and mixed-use developments - within the next 12 months.

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