THE property arm of Miller Group is investing £60m in two new developments as part of a plan to shift its focus more towards Europe.

Miller Developments, part of the UK’s largest privately owned housebuilding, property development and construction business, is developing a £46m shopping centre in Sliema, Malta, and a £14m retail park in Hassloch, Germany.

The two ventures are the first since Miller said it was looking to raise almost £700m to invest in retail property across Europe.

No decision has been made on the make-up of the fund but Miller is thought to be keen to work with private investors rather than go down the stock-market route.

The company plans to change the balance of its portfolio with more than 50% of developments and investments in Europe by the end of next year.

Phil Miller, chief executive of Miller Developments, said rising interest rates and a tightening property market in Britain meant there were fewer opportunities.

“We are still looking at development opportunities in the UK rather than investments because of the current condition of the market. We are fortunate because we have a strong equity position,” said Miller.

“But Europe, especially the EU accession countries, continues to offer a massive opportunity.”

The company is working in Bulgaria, Romania and Hungary as well as in Spain and Portugal. Miller said Malta was attractive for developers as it benefits from EU membership. Debenhams will anchor the Point Shopping centre development at Sliema, near Valletta, which is due for completion in 2009.

“Malta’s raised its game and getting more tourists. The arrival of low-cost carriers, a well-educated workforce and close proximity to many European and North African countries also help,” he said.

Miller is currently operating in eight countries and about to undertake a strategic review to consider new possibilities.

“China and India, as well as Russia, have obvious attractions but risk as well,” said Miller, who has been with the company for 17 years but is no relation to the family that owns the group. He said the Maltese and German developments would be joint ventures with local partners.

The property arm had an operating surplus of £28.3m last year. Group profits were £81.7m on a turnover of £1.2 billion. Interim results are due out next month.

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