Surge in Barings investment as it expands European platform

Barings Real Estate has continued into this year the spending and investment spree that saw it transact more than €1bn in German real estate deals in 2017, in the process more than doubling its volume of 2016, and tripling its overall European volume to €1.9bn.

REFIRE met with Charles Weeks, Head of Real Estate Europe for Barings at the recent MIPIM in Cannes, who stressed the growing interest in the group's investor base of more than 200 investors in having a pan-European investment strategy. The segment of core and structured debt investments also underwrote new business valued at €995.4m, with European assets under management risign 20% to US$5.4bn.

Barings, which is part of US insurer Mass Mutual, now has more than 100 staff in 13 European branch offices pursuing its core- and value-add investment strategy. Weeks said, "2017 was a record year for us in Europe. We tripled our acquisition volume over 2016, and were able to close diversified transactions across all European regions, real estate categories, and risk strategies…. Our clients tell us that they want specialists – local expertise combined with a pan-European global investment approach, which we're now able to offer.

In Germany, prominent recent deals include buying the Vattenfall building in Berlin and its recent acquisition of a 184,000 sqm logistics asset in Unna, near Dortmund in North-Rhine Westphalia, for €90m on behalf of a US investor.

The asset is fully let to the department store group Karstadt until 2026 and operates as Karstadt's national distribution site. Barings bought it from a joint venture between a US investor and M7 Real Estate, who had owned it for barely two years, in what was one of the largest transactions in the European logistics sector over the past 12 months.

Baring's head of Germany Christoph Wittkop said, “We are planning to significantly increase our logistics exposure across Europe, including Central and Eastern Europe, through the acquisition of existing assets as well as through forward funding or purchasing developments.” He added that Barings is targeting core to value-add opportunities and will consider both single properties, as well as country-focused or pan-European portfolios.