Greeks deliver gifts for APN

APN Funds Management is to launch a new European property fund with 16 Greek supermarkets as its assets.

The APN Champion Retail Fund will be an unlisted fixed term fund with the assets acquired from the APN/UKA European Retail Property Group.

This acquisition is part of a move to raise between $56 and $62 million in equity, giving the Anglo-Australian property manager an acquisition war chest of $126 million including debt.

The Greek supermarkets are being leased to European retailing giant Carrefour till 2022 and will give the new fund an initial yield of 9 per cent.

APN head of European funds Charles Raymond said the new fund would run for approximately six years, with the income returns underpinned by strong leases to the largest retail tenant in Europe.

“The fund will be independently rated and expectations are for a strong rating given the long and high quality underlying lease covenant,” he said.

“The fund will also be protected from currency and interest rate movements, ensuring investors receive returns commensurate with the underlying properties.”

Another APN property fund is to become an investor in the Champion Retail Fund.

The APN Euro Property Fund will be raising further capital to fund an acquisition of the Greek retail fund to increase its geographical diversity. The Euro fund is currently an investor in Poland and Austria through associated APN funds.

APN chief investment officer Howard Brenchley said the Euro fund was giving Australian investors exposure to a wide range of European commercial property through an open-ended unlisted structure.

“The fund will provide significant exposure to a range of European commercial property markets, offering investors a high initial yield of in excess of 8 per cent,” he said.

APN is going to have the fund rated and independent research reports would be available for both the Euro and Champion Retail funds after Christmas.