ActivumSG exits three further repositioned German assets

Jersey-based real estate fund manager ActivumSG Capital Management has just completed two deals in Germany that are almost textbook examples of what it purports to do best – buying under-managed office assets in good German city locations and repositioning them to becoming core assets prior to lucrative exit.

The first deal involved the Saul Goldstein-led Activum’s Fund II selling the 22,500 sqm Accent Office Centre (AOC) in Frankfurt’s up-and-coming Hanauer Landstrasse to Munich-based GLL’s Pan-European Property Fund, at a price thought to be around €60m. Activum bought the 2004-built office in 2011. For GLL, the asset with a cap rate of 6.95% is the fund’s first acquisition. The planned €1bn fund targets institutional investors and aims for a dividend payout of 5%.

Richard Wartenberg, ActivumSG’s head of sales and acquisitions, commented, The asset boasts a good location in the growing east end of Frankfurt but needed better management. We identified the potential, took over and realised a dynamic leasing strategy. Today, the building is nearly fully occupied with a well-diversified tenant structure and long leases. The rental level is above expectations. AOC is a fine case study of how active management can create core assets.”

Meanwhile, Activum SG’s Fund I sold the Main Michelangelo 9,100 sqm building in Frankfurt and the 7,900 sqm G1 in Munich to Vienna-based FLE, part of the French LFPI Group. Both buildings were constructed in 2002, and each is 90% occupied. Activum acquired the properties in 2009 and 2010 with vacancy rates of over 50%. “Both these assets have similar stories – office buildings in secondary locations in prime German cities where an active lease up/value add strategy meant that we took the occupancy from under 50% to over 90%,” said Wartenberg. “We are thrilled to sell these assets on to FLE who will benefit from the attractive yields and stable tenant bases offered by these two high quality buildings.”

The two new assets bring LFPI’s portfolio to 54 properties in Germany and Austria. FLE managing director Alexander Klafsky said Frankfurt and Munich are highly interesting locations. “The attractiveness of the new office assets stems from the continued prosperity of these two cities. The properties also fulfill our investment criteria, which include an attractive location with optimal accessibility, several strong tenants as well as flexibility in usage and high quality.”