Deutsche AM provides €45m French mezz loan

Ares Management secures additional financing for two retail assets acquired last year.

Deutsche Asset Management has provided a €45 million mezzanine loan to Ares Management to finance two designer outlet retail centres in France, PDI sister publication Real Estate Capital has reported.

The mezzanine loan will supplement an existing senior loan facility provided to Ares by an undisclosed lender.

The US-based alternative asset manager bought the two designer outlet centres in the cities of Troyes and Roubaix from Resolution Property in February last year. The price totalled about €200 million.

At the time of the acquisition, Ares partnered with European outlet centre operator McArthurGlen, which manages the properties.

John Ruane, partner with the Ares Real Estate Group, said at the time the firm had identified “significant” potential on the outlet centres “to create value through active management, including improving the tenant mix and upgrading the buildings”.

The outlet centres comprise approximately 47,000 square metres and feature retail tenants, including Polo Ralph Lauren, Nike and Hugo Boss. The Troyes location is the largest outlet centre in France.

The Ares Real Estate Group has invested in European retail real estate in the past. In December 2015, it acquired a portfolio of three UK retail parks from Land Securities.

More recently, it bought the gastronomic market Mercado San Miguel in Madrid for €70 million, through its joint venture with Redevco, which is targeting €500 million of value-add and opportunistic investments in retail properties in Spain and Portugal.