The “Deutsche Investment – Food Retail I” open-ended real estate fund is the first separate asset pool that Deutsche Investment Retail, a specialised investment and asset manager, designed and launched together with Deutsche Investment Kapitalverwaltung in 2020. Two years on, the fund manager is taking stock:
“We are looking back on turbulent times. Despite a series of unforeseeable events, one thing remained constant: the relevance of everybody’s basic needs. The important role that food retailing plays in ensuring that the general public is resupplied at all times has clearly demonstrated the sector’s crisis resistance, especially over the past few years. The robust nature of this asset class is supplemented by the long-term leases signed with high-net-worth tenants and stable rental yields, which have caused the grocery asset class to evolve into a promising niche investment, and this is reflected in the performance of our separate asset pool,” explained Susanne Klaussner MRICS, Managing Partner or Deutsche Investment Retail.
The “Deutsche Investment – Food Retail I” open-ended special AIF has a target volume of c. EUR 300 million, around 45 percent thereof representing debt capital. The investment focus is to build up a widely diversified real estate portfolio of stand-alone food markets and retail parks occupied by blue-chip tenants and located in sustainable German cities with a bright outlook. The fund seeks to earn a projected cash-on-cash yield in excess of 4.6 percent.
At the end of a successful fund-raising phase, Deutsche Investment Retail had collected c. EUR 180 million more equity than planned. At the investors’ request, the fund was closed. It is almost fully invested. “Our direct market access, our expertise of decades in the business, and our partnership background enables us to transact the acquisition of strategy-compliant assets quickly at any time after a fund is launched. This way, our investors benefit from a speedy capital drawdown and an attractive portfolio that, in addition to established sites which represent strategic key locations for our tenants, includes certified new buildings that meet the green standard of the DGNB German Sustainable Building Council,” elaborated Matthias Kreil MRICS, Head of Transaction Management at Deutsche Investment Retail.
Overall, Deutsche Investment Retail concluded its review of the separate asset pool’s performance on a very reassuring note. “Many developments we recently witnessed were impossible to foresee at the time of the fund’s inception. But they have left us all the more convinced that remaining committed to the grocery asset class and to keep putting our specialised know-how to work on behalf of our investors is the best thing to do. Accordingly, we have already progressed to the licensing phase with our next food retail fund,” summarised Enver Büyükarslan, Managing Partner of Deutsche Investment Retail.