Australian institutional investor QIC, through its Global Real Estate division, has announced the creation of the QIC US Shopping Center Fund, which will provide investors with a rare opportunity to capture the performance of select U.S. retail real estate markets.
QIC is now recognized in the U.S. as a regional shopping center specialist with proven deal flow capability.
QIC’s Global Real Estate Managing Director, Steve Leigh, said the Fund will be a core plus, open-ended fund targeting direct investments in U.S. regional shopping centers.
“Fund investors will have immediate exposure to an interest in a seed portfolio of U.S. regional shopping centers, positioned for growth with low average occupancy costs plus a range of potential development projects,” Mr. Leigh said.
The Fund intends to grow by acquiring quality U.S. regional shopping centers and retail assets that are dominant in their trade area or have the ability to achieve that market position over the long term. QIC will seek a strategic stake in future acquisitions through outright ownership or joint venture partnerships.
“The retail market in the United States is attractive to QIC due to the supportive fundamentals of a sound and growing economy, employment growth and positive consumer confidence,” Leigh said.
Leigh said that the choice to establish a fund was initially driven by a rebalancing requirement of a foundation client who will become the cornerstone investor.
“Initial market soundings confirm our view that there is strong institutional investor interest in participating in this fund,” Leigh said.
All of the seed assets, excluding The Shops at Tanforan, are held in joint venture with subsidiaries of Forest City Realty Trust, Inc (FCE), a $9 billion diversified real estate investment trust based in Ohio. QIC assembled the seed portfolio in off-market transactions over multiple tranches.
The portfolio benefits from a low average occupancy cost of 11.2 percent, as well as an average sales productivity of about $515 per square foot. It comprises approximately 12 million square feet of lettable area with additional retail and other space entitlements.