Fast-spending Henderson Park clinches two fresh German deals

European private equity real estate investor Henderson Park has cut several sizeable deals this month, two of which represent a big vote of confidence in the German real estate market. 

The group only closed its debut closed-end real estate fund in July this year at a whopping €1.9bn, targeting value-add and real estate investments across Europe.

In the first deal, Henderson park teamed up in a joint venture with German property group HBB to buy the Rathaus Galerie shopping centre in Essen. The price paid was undisclosed, although the property was valued at over €123m in July last year before a major lease extension for 8,000 sqm with tenant the Real hypermarket. The seller is the CS Euroreal fund.

The deal was Henderson’s first shopping centre asset, and it is taking the majority stake in the 31,000 sqm centre, with HBB as minority partner, and manager of the asset.

Rathaus Galerie is 80% let and Henderson Park said the joint venture’s turnaround strategy includes a comprehensive refurbishment, improving the tenant mix to concentrate on convenience retail, as well as an enhanced food and beverage and leisure component.

The centre acts as the acts as the main entry point for Essen’s city hall and sits directly above Rathaus Essen Station, the city’s central transport hub, providing access to six metro and tram lines, as well as 13 bus lines, with 40,000 passengers passing through on a daily basis. The prominent building, which forms a bridge across the eastern city ring road, also has generous parking provisions to complement the centre’s strong connectivity.

Anchor tenants include hypermarket Real and sports retailer Decathlon. The centre, now more than 40 years old, has more than 10 million visitors annually. Essen itself is Germany’s ninth-largest city and home to numerous sizeable corporations. Its population is growing and projected to rise by 3.4% by 2030. Located in a densely populated part of North Rhine-Westphalia, there are more than 11 million people within an hour’s drive.

Nick Weber, Henderson Park’s founder, said of the deal, “This transaction increases our exposure to the highly attractive German market through the acquisition of a proven retail asset at a competitive price point alongside our experienced local partner, HBB.

“The decision to make our first shopping centre acquisition was driven by the Rathaus Galerie’s dominant status and the latent value we believe can be captured; we intend to implement an asset management strategy that focuses on the introduction of retail and leisure amenities that are most appropriate for the local demographic and which capitalise on the centre’s strong location and surrounding infrastructure.”

Secondly, Henderson park then partnered with funds managed by Swiss Life Asset Managers to buy the Kustermann Park office complex in Munich for €400m. The complex consists of two buildings with 74,000 sqm of lettable space, fully-leased, with nearly 900 parking spaces.

Henderson Park is buying Rockwell Haus, a 42,000-sqm building and Swiss Life AM will acquire the other 32,000-sqm Brinell Haus property.

Maureen Mahr von Staszewski, senior pan-European fund manager at Swiss Life Asset Managers, said that, given low vacancy rates, gaining access to the Munich office market can be difficult for investors.

Henderson Park founder Nick Weber commented: “Structuring this transaction alongside Swiss Life AM allowed us to present a compelling offer to the vendor while enabling us to invest in a well-located office building in Munich.

“Rockwell Haus offers both the opportunity for active asset management, by taking on the refurbishment and through leasing up vacant space, as well as high-quality long-term income from the pre-leases that have already been agreed.”

Henderson Park’s Real Estate Fund I (HPREF I) was seeded earlier this year with a $500m commitment from Stone Point Capital, Kuwait Investment Authority and Wafra Investment Advisory Group, and exceeded its $950m target to raise $2.2bn, while securing an additional $750m of co-investment capital to deploy alongside the fund. This makes it Europe’s largest maiden private equity real estate funds.

The plan for the fund is to make equity commitments of between $50m and $150m per deal into value-add and opportunistic property investments across Europe. It can invest both directly or indirectly through corporate acquisitions, and in all asset classes. However, it has so far focused on hotels, offices, industrial and student housing, as well as multifamily residential. It has already made 19 investments worth $5.4bn, including trophy hotels Le Meridien Etoile and the Westin Paris-Vendome in Paris, in what is by any measure a very speedy deployment of its raised equity.

The fund is now the sixth-biggest fund raised in the sector, behind three from Blackstone, and one each from US private equity group Carlyle and the Leon Bressler-led Aermont.