Listed property trust Macquarie CountryWide Trust (MCWT) has raised $120 million from institutional investors towards its European property investments.

The raising attracted support from investors both at home and overseas offering units for $2.07 each, a five cent discount to Thursday's $2.12 closing price.

MCWT has bought five hypermarkets in Poland and two in Germany for $571 million (€351 million).

Macquarie CountyWide's chief executive Steven Sewell said the acquisition was Trust's first European investment. 

"This transaction demonstrates the Trust's ability to recycle out of mature assets into earnings accretive assets in new markets and investors have viewed this positively," he said.

Australian investors are increasingly looking towards European property as a means to diversify their portfolios, in particular Germany.

Fund manager Pengana Capital this week announced it had teamed up with UK fund manager Credo to launch the Pengana Credo European Property Trust, which has already invested in three German properties worth $158 million.

The introduction of Real Estate Investment Trust legislation to Germany in March has the potential to revolutionise the country's moribund property market.

The lucrative tax breaks provide an incentive for German corporates to sell off their property or create their own REITs.

Given that 73 per cent of German office property is privately owned it could cause a flood of liquidity and create a market worth up to €110 billion, according to some estimates.

The units issued under MCWT's placement will have equal rights with existing units and will receive the full dividend for the period ending 30 June 2007.

The institutional placement was fully underwritten by Macquarie Equity Capital Markets, Merrill Lynch and Morgan Stanley.