European real estate fund manager Aerium has completed the purchase of a landmark high street retail development project in the city centre of Kiel, northern Germany for EUR 71 mln. It has also formed a joint venture with Matrix AG to undertake the development of the project.

Located in a prime retail location in the pedestrian zone of Kiel, the property consists of a vacant Karstadt department store and an adjacent car park. Construction of a new 20,000 m2 multi-let retail complex together with 667 parking spaces will start immediately upon demolition of the existing structure. The asset is already 71% pre-let to a strong line-up of tenants on long-term leases including Media Saturn, dm-drogerie, C&A, Karstadt Sport, REWE and Q-Park. Completion of the development is scheduled for October 2012.

Aerium has extensive experience of managing retail assets across Europe, in particular in Germany. Its German portfolio currently comprises 63 assets valued at around EUR 600 mln and represents a mix of retail parks, super and hyper markets, high street retail and office buildings.

This transaction represents the company's first acquisition in Germany since 2008 and marks the first investment for its EUR 200 mln German Retail Opportunity Fund, a sub-fund of Aerium's Special Opportunities Fund. The closed-ended fund is targeting large-scale investment and development opportunities in the retail sector across Germany. Aerium is working towards a final close of the fund in the autumn of 2011.

'Our decision to open an office in Germany last year and also having a native German team based in London driving investment, enables us to identify interesting partners and opportunities such as Kiel,' said Franck Ruimy, CEO of Aerium.

Aerium is a Luxembourg-based financial services group. It manages private equity real estate funds in continental Europe, as well as separate mandates for institutional clients, with a portfolio comprising over 650 properties worth EUR 7 bn.