Peakside lighten up on resi, swoops on 14-unit office portfolio
In what has been a busy month for transactions for the company, European real estate private equity firm Peakside Capital has made its first acquisition on behalf of its third real estate fund, Peakside Real Estate Fund (PREF III). The deal follows the earlier sale of a portfolio of more than 800 residential assets to acquisitive fund group Patrizia Immobilien.
On the buying side, Peakside bought a portfolio of 14 mainly office assets in Germany from two institutional investors. The assets are city-centre properties with 37,000sqm of lettable space, located in Berlin, Stuttgart, Düsseldorf and Hannover including cities such as Munster and Erlangen.
The acquisition follows Peakside Capital’s recent €110m capital raising for value-added funds PREF III, just five months after the fund's initial closing. The purchase of the portfolio commits about 75% of the €150m total equity raising target, which should ultimately provide over €500m of investment firepower, the company said.
Investors committing capital included German and international institutional investors and family offices, many of which invested in predecessor fund, PREF II.
According to Boris Schran, founding partner of Peakside Capital: “We were able to secure a portfolio of good and fundamentally institutional assets in need of focused asset management and lease-up activities for an attractive entry price well below replacement costs."
“Our strategy is to sell individual assets or sub-portfolios given the attractiveness of the assets. They are the right size and, once stabilised and leased up, will fit the core profile of long-term and distribution-income investors, who are not competing for nationwide portfolios but are looking for more regional opportunities for direct investment.”
Stefan Aumann, founding partner of Peakside Capital along with Schran, added: “We expect more acquisitions on behalf of PREF III by the end of the year, building an attractive seed portfolio prior the final close of PREF III.”
Earlier in the month Peakside conclude an 805-unit residential portfolio sale to an institutional Spezialfonds managed by Patrizia for about €90m. The 60,000sqm portfolio, which includes 33 commercial units and around 370 parking spaces, is spread across 19 properties in six locations.
Patrizia said the majority of the properties are located in Bavaria and Berlin, with the remaining located in Amberg, Oberursel, Stuttgart, Kitzingen and Deggendorf.
"Now was the right time to put this stable residential portfolioon on to the market and gain from the positive market sentiment for residential properties," commented Boris Schran, one of Peakside's founding partners.
Over the last two years, Peakside said it had executed comprehensive asset management initiatives to enhance the capital value, raising rents.
Aumann added, "The apartments formed part of a portfolio that was originally acquired in 2008. With the sale of these remaining assets, the has been fully realised within the original timeframe… Although many of the fund's assets had been acquired before the financial crisis, Peakside didn't suffer a single loss-making deal and has successfully returned 1.7x the equity to investors," he concluded.