UPDATE 1-ASR REIM launches 1.1 bln eur property fund

Thu Jun 30, 2011 1:27pm EDT

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(Adds details of fund, investment strategy)

LONDON, June 30 (Reuters) - ASR Real Estate Investment Management (ASR REIM) plans to raise 300 million euros ($426 million) this year for a new fund with exposure to 1.1 billion euros in Dutch prime retail property, giving investors access to high streets where space is scarce.

ASR REIM, a unit of Dutch insurer ASR Netherlands , said the ASR Dutch Prime Retail Fund is seeded with a core portfolio of 210 Dutch prime properties as well as another 280 million euros in investment opportunities.

The close-end fund is targeting returns of 7 to 9 percent and a dividend of 5 percent, Dick Gort, ASR REIM's chief executive told Reuters.

The fund aims to raise another 800 million euros after 2011 and plans to invest the new equity in additional real estate, he said.

"We are planning at the moment how should we do that. Should we do that directly, should we do that indirectly, should we do that in the Netherlands should we do that in Europe -- maybe global," Gort said.

He said that in principle there would be no gearing on the fund, and while there was the possibility of adding some gearing to it, it would be more working capital.

The portfolio comprises about 65 percent high street space, with property on all of the main Dutch cities' high streets, Gort said, adding that vacancy was below 1 percent.

The Dutch retail market outperformed in income growth and had low-volatility capital growth, which has resulted in positive total returns for the last 10 years, ASR REIT said.

Properties in the fund include single town-centre units, regional shopping centres and supermarkets, covering a lettable area of over 300,000 square meters.

"Over time we anticipate bringing additional Dutch funds of a similar high quality to the market for institutional investors from other real estate sectors," Gort said in a company statement.

($1 = 0.705 Euros) (Reporting by Karen Foster; Editing by David Holmes and Jane Merriman)

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