Behringer Harvard Invests in German Retail Assets via New Joint Venture With Rahlfs Immobilien

Portfolio Features Large Discount Retailers as Anchor Tenants

PRNewswire
DALLAS

DALLAS, Oct. 19 /PRNewswire/ -- Behringer Harvard announced today the formation of Behringer Harvard German Retail LP, a joint venture with Rahlfs Immobilien GmbH focused on building a portfolio of retail properties. Initial investments include six retail properties in the Hannover region of northern Germany. The partnership also intends to pursue additional investments with the goal of creating a larger portfolio during the program's anticipated five-year holding period.

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Through this joint venture, Behringer Harvard has become both a mezzanine lender and an equity partner in the initial portfolio of six retail properties. Development is completed for three of these assets. The other three are build-to-suit properties under construction and slated for completion within 12 months. The portfolio's anchor tenants are affiliated with the largest discount retail operators in Germany. Among the tenants are discount grocers including Leigh Richmond's Netto, Edeka's NP and the REWE Group's Penny Market, as well as non-food retailers including Rossman, a supplier of health and beauty products, and discount apparel retailers Ernsting's family and KiK.

"The investors in this portfolio are interested in achieving geographic and industry diversification for their real estate investments through exposure to the discount retail market in Europe's largest economy. This partnership with Rahlfs enables us to participate in German retail development with a group that has local-market expertise as well as decades of success with this real estate product type," said Mr. Michael Cohen, Senior Vice President of Behringer Harvard and head of the company's international investment platform. "This venture also allows us to leverage our local partner's established relationships with the top retailers in Germany."

Rahlfs Immobilien GmbH has operated as a family-owned company since 1905. Founded as a construction company, Rahlfs subsequently expanded into real estate investments and asset management services. For more than 30 years, Rahlfs has focused on real estate developments serving the retail industry in Germany. Rahlfs will manage construction of the three properties in development and will be responsible for leasing and property management for assets in the portfolio.

Consumer demand for new and state-of-the-art retail spaces has been characteristic of the German market, which is the economic heavyweight in Europe. However, retailers face significant barriers to entry created by German zoning and planning regulations that limit access to areas that can be developed for new retail purposes. In spite of these barriers, German retail properties continue to attract investors seeking assets with creditworthy tenants, long-term leases and a strong potential for steady cash flow.

Discount retailing accounts for 40 percent of retail sales in Germany. Recent financial turbulence and a slowdown in economic growth have dampened consumer confidence and increased consumer dependence on discount retailers, according to the Germany Food and Drink Report for the third quarter of 2009. The report forecasts that until the German economy normalizes, discount retail operations are likely to provide attractive short-term returns.

About Behringer Harvard

Behringer Harvard is a commercial real estate company investing in assets domestically and internationally. The company creates and manages strategic real estate fund opportunities across a wide spectrum of investment styles for retail investors, as well as domestic and international institutions, through its real estate investment trusts, partnerships, joint ventures, and proprietary program structures. For more information, call toll-free 866.655.3600 or visit behringerharvard.com.

SOURCE Behringer Harvard

SOURCE: Behringer Harvard

Web site: http://www.behringerharvard.com/
http://www.bhfunds.com/