Dutch firms form $1 bln U.S. retail property fund

LONDON, April 18 (Reuters) - Dutch financial firms United Investment Company and SNS REAAL (SR.AS: Quote, Profile, Research, Stock Buzz) aim to take advantage of the U.S. subprime crisis by building a $1 billion fund of U.S. retail properties, company officials said on Friday.

"Contrarian-wise, the best time to pick up market share and get great values is when everybody else is paralysed and can't act," said Fort Worth-based Biff McGuire, chief executive of United Investment subsidiary UDC Global.

UDC Global will oversee the fund, which will finance the development of smaller-scale and lower-risk retail properties such as petrol stations, banks and Starbucks coffee shops, said Utrecht-based Arjen van Rijn.

Van Rijn is a director of SNS Property Finance, a unit of SNS REAAL.

McGuire said the fund had a nine-year lifespan and was aiming to achieve annual percentage returns "in the mid-teens", but there was some potential to generate more than 20 percent per year due to a favourable market entry point.

The fund has already completed agreement on 14 projects totalling $40 million in Texas, Oklahoma and Florida with companies such as Starbucks (SBUX.O: Quote, Profile, Research, Stock Buzz) and Chase Bank.

McGuire also said UDC Global planned to expand its U.S. holdings to $2 billion by 2010 and was eyeing high quality residential and hospitality developments in other Sunbelt regions, as well as retail real estate. (Reporting by William Kemble-Diaz; Editing by David Holmes) (See www.reutersrealestate.com for the global service for real estate professionals from Reuters).