€250m investment flurry will see Tristan top €1bn in Germany this year

In a sign of marked confidence in the German market, Tristan Capital Partners has invested €250m to buy three German commercial properties for its latest European opportunity fund, the EPISO 5 Fund, the company said at the Expo Real fair in Munich in early October.

The latest deals bring the combined value of the pan-European real estate investment manager’s 11 acquisitions and sales in Germany this year alone to around €900m, and with a further €200m of transactions in the pipeline, the company expects to top the €1bn volume milestone before the end of the year.

Tristan now has exposure through EPISO 5 and other managed funds of about €2bn of assets under management in Germany, having been involved in the market for more than 20 years.

The value-add, opportunistic EPISO 5 fund – which raised €1.7bn in February – has invested €99m in a Berlin development site with the potential for 30,000 sqm of office and commercial space and has bought an under-rented office building and land plot with an expected 10,880 sqm buildable area in the North Munich for €91m. It also paid €62m for a portfolio of five office buildings located in Munich (2 assets), Frankfurt, Dusseldorf and Hildesheim, to complete the trio of acquisitions.

According to Ali Otmar, senior partner and deputy head of investments at Tristan, “Tristan has been investing in Germany since 2002 and over the past couple of years it’s become even more of a strategic priority for us. Over the past year, we have been focusing on well-located assets in the more supply-constrained sub- or secondary markets around Munich, Frankfurt and Dusseldorf, completing around €900m of acquisitions so far in 2019.”

On the latest deal of the trio of acquisitions, Otmar said, “The market reaction was very positive. General market participants struggle to do off-market deals as they don’t have the same reach into a wide range of markets…I think we’re very comfortable as we’re not over allocated but well-allocated in the total market. We like Germany because it has the most liquidity among all European markets. We know how the economics, tenant base and connections work in order to lease up these buildings and sell them.”

The Berlin development is a joint deal with CMF Capital to buy a redevelopment plot (Inspire Neukölln) in the Neukölln district, in which the fund will invest about €100m. The seller was the Eversfrank Group. 

In Munich, the fund bought an office property in the micro-location Milbertshofen district from AXA with rental upside potential, and chance to fully refurbish, along with adjacent development land. The site is near BMW’s main headquarters and a cluster of automotive supply chain companies, with direct access to major transport arteries and Munich Airport. The project will cost Tristan about €91m, partnered with DW Real Estate in a joint venture with brixx projektentwicklung, both Munich based. It’s Tristan’s second joint venture with DW Real Estate after buying a multi-purpose, multi-let 31,000 sqm office building in Heildelberg earlier this year.

The portfolio for €63m was bought from Hamburg-based Union Investment in an off-market deal. Tristan worked with Silverton Asset Solutions to do the deal, and Silverton will subsequently act as operating partner.