Bank of Ireland Group offers excellent opportunity through European Retail Property Portfolio
Current from: 15 October 2007
Today, 16th October 2007, Bank of Ireland Group is delighted to announce the launch of their new European Retail Property Portfolio. For the first time, individual investors have an opportunity to tap into the capital growth of retail commercial properties through a dedicated property portfolio.
Today, 16th October 2007, Bank of Ireland Group is delighted to announce the launch of their new European Retail Property Portfolio. For the first time, individual investors have an opportunity to tap into the capital growth of retail commercial properties through a dedicated property portfolio.
The portfolio, open for a limited time, has the potential for higher returns using a combination of investor funds and borrowed money to invest in a diversified portfolio of three to four professionally managed European retail properties. The portfolio will provide investors with improved diversification than investing in a single property in terms of different retail concepts, locations and varying leases. To date, two retail properties have been sourced which are valued in excess of €1billion. The interest in these properties will make up over two-thirds of the portfolio and comprise of a retail park in Liverpool and a shopping centre with retail park in Zaragoza, Spain.
Bank of Ireland Private Banking has acquired and will manage the portfolio with the objective of maximising returns. They currently have property assets of around €2.6billion under management on behalf of their clients. Based on disposals to date, investors have earned an average annualised return of 26.1%.
The portfolio aims to attract up to €150 million in investor funds in order to part-finance the purchase of prime retail property in targeted European countries. The investment horizon will be approximately seven to ten years, in order to take advantage of any capital appreciation that results from an anticipated upturn in the retail property sector in core European countries. The portfolio will be two-thirds seeded from launch, with the remaining equity to be allocated once one or two suitable properties have been identified and secured.
The portfolio is available through Bank of Ireland Life and the Group’s Private Banking Division. Approximately two-thirds of the purchase price of the properties acquired will be financed through borrowing (gearing). The key advantage of gearing is that any gains in value on the property purchased with the loans also accrue to the investor, significantly enhancing potential investment returns. However, this also means that there is a greater increase in risk. The borrowing is non-recourse, which means that investors will not be personally liable for loan repayments as this is all managed within the Portfolio.
Mr. Peter Collins, Director, Private Banking, explained the attraction of the European retail market. “We believe that the European retail market represents a good opportunity for clients, with strong consumer spending in many markets. Combining this with the structural under-supply of quality shopping space should result in strong rental growth, driving the value of retail properties. We are focusing on dominant retail parks and shopping centres in major urban areas, giving investors good diversification across retailing types, tenants and locations.”
Bernard Walsh, Head of Investments, Bank of Ireland Life comments on the opportunity that the European Retail Property Portfolio presents investors; “Retail parks continue to be the most sought after commercial property in the European market, with total investment volume reaching €15 billion in 2006, reflecting a 60% increase from 2005. Overall the retail sector is a very liquid investment market with many international investors, however very often it is inaccessible for the individual investor. Retail property is less volatile than the office sector as it is more supply constrained, making it an exciting opportunity for the Irish investor looking to capitalise on this growing market. In fact, the provision of shopping centres in Europe per head is actually eight times lower than that of the US.”
The portfolio is targeted at experienced investors seeking growth and who are prepared to accept an element of risk. The minimum investment required to participate in the fund is €50,000 and the fund will close by 31st January 2008 - or sooner if fully subscribed. Further details are available on request from the Investment Adviser at your local Bank of Ireland branch.
For further information contact:
Laura Erskine
Public Relations Manager
Bank of Ireland Life
Ph. 01 617 2586
Mob. 086 856 2929
New Ireland Assurance Company plc trading as Bank of Ireland Life is regulated by the Financial Regulator and is a member of the Bank of Ireland Group.