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UK's Miller seeks £680 mln to fund expansion on the Continent

Miller Developments, the commercial property arm of the Miller Group, plans to raise a £680 million ($1,35 billion, €1 billion) fund by the end of this year as it beefs up its presence in Europe.

The company, part of Edinburgh-based Miller Group, has built a wide portfolio of property interests - mainly new-build schemes - but is also keen to make longer-term investments in existing developments in order to cash in on a booming property market, particular in central Europe. During a visit to an out-of-town scheme which the company developed in Hungary, CEO Phil Miller last week revealed that he may launch a European investment fund to raise between €500 million - €1 billion ($677 million - $1.35 billion). "We are prepared to have a certain amount of equity in longer-term plays," he said, adding that the company would consider putting up 20%, with the rest coming from third-party investors.

Miller, who has been with the company for 17 years but is no relation to the family owners, says there are "massive opportunities" in Europe. The company has spent nine years there developing projects with local joint-venture partners. "We are almost mistake-free, and that is down to working in joint ventures," he said. The company has built retail parks in Germany, Portugal, Romania and Spain, where it is to embark on its largest project in mainland Europe after buying a 14 hectare site. Miller has formed a joint venture with Portugal's Sonae Sierra to acquire the site in Granada, where it plans to build a £72 million ($143 million) retail scheme. The Hungarian project, 10 miles west of Budapest, is the first US-style factory outlet selling discounted brand name goods in a country that has had no previous experience of the concept. The Premier Center Outlets has proved so popular that top retailers such as Levi, Nike and Puma have taken more space since it opened in 2004.

The first two phases were sold for €70 million in August to Morley Fund Management on behalf of its Aviva Central European Property Fund. A third phase will open in November and a similar center is being built in Denmark. Miller is close to doing other retail deals in Greece and Malta and is also looking at Bulgaria. He says there are a lot of UK-based property investors in Europe but Miller is among the few undertaking developments. "I think they are missing an opportunity, as the EC is expanding and these markets are opening up," he said. (