Deka Immobilien buys €700m retail portfolio from Dutch group

German fund manager Deka Immobilien has bought a diversified portfolio of 51 city-centre retail assets in 37 German cities for €700m. The seller was D&R Invest, which represents a group of Dutch private investors.

Deka said that the assets will be divided between various special funds for institutional investors. Some 44 properties, valued at €480m, will form the seed portfolio for a new German-focused vehicle called Domus-Retail-Germany, investing on behalf of Germany's savings banks, or Sparkassen.

The 51 assets were managed by D&R Investments, a Dutch company that specialises in A-1 retail real estate investments in Germany and leisure real estate investments in the greater Amsterdam area. The portfolio, known internally as the Julia Portfolio, had been assembled over several years, including the acquisition of a big portfolio bought from the Düsseldorf-based Centrum-Gruppe in 2012 for about €150m. The Julia Portfolio represented practically all the German assets held by D&R.

According to Dutch trade publication Vastgoedmarkt, the Deka deal is part of a larger transaction, in which Dutch investor RJB Group and D&R Investment are disposing of nearly €2bn of property assets. The Dutch assets, numbering nearly 300, are being sold to Syntrus Achmea, an investment vehicle for pension funds.

The 51 inner-city retail properties are located in 37 mainly A and B cities and are almost fully let. The buildings are located in prime locations within pedestrian areas in cities such as Cologne, Hannover, Regensburg, Kiel or Lüneburg. The total lettable area is137,000 sqm. The main tenants are well-known fashion chains.

"The deal provides us with a rare market opportunity and enables us to further expand our institutional business," said Torsten Knapmeyer, managing director of Deka Immobilien. "We are reacting to the strong level of demand from institutional investors for real estate investments."

Deka Immobilien has investments in 23 countries and had about €27 billion of real estate assets of the end of 2014, while Deka Group had roughly €220 billion in assets as of the end of 2014. Deka Group is the investment arm of Germany's Sparkassen.