DIC Asset launches third German fund, targeting core

Listed German office property developer and investor DIC Asset has just launched its third open-ended fund for institutionals, the DIC Office Balance II Fund, targeting an initial volume of €200m and focusing on core German office property occupied on long-term leases.

The fund is being specifically created for two clients, SV Sparkassen Versicherung in Stuttgart, and Helaba Invest KAGmbH, Frankfurt, on behalf of several of their institutional investors. DIC Asset will itself take a stake of around 5% in its own right, while also handling the asset management and property management as well as the property acquisitions and sales.

As with DIC Asset’s earlier funds, IntReal International Real Estate Kapitalverwaltungsgesellschaft mbH, Hamburg, is serving as the investment service company (“Service KVG”).

The fund has already bought its first office property, the highly prominent “Barbarossa Center” with some retail units on Barbarossaplatz in Cologne from an international institutional investor for about €32 million.

Originally built in 1972, the centre was redeveloped and modernised in 2002 and 2013. It extends over 13,300 sqm of rental space across 19 floors. The building is fully occupied by nine different tenants.

Separately, the Frankfurt-based DIC Asset bought another two retail properties for €27 million that are earmarked for the “DIC HighStreet Balance” institutional fund. Both of these assets – one located in Düren, the other in Wuppertal – have a rental space of around 4,000 sqm, are situated in prime high street locations and are almost entirely let on long-term leases to blue-chip tenants clothing retailer Peek & Cloppenburg and the drugstore Rossmann, respectively. The acquistions bring DIC Asset’s spend up to over €60m this year so far.

DIC Asset has now launched three institutional funds since 2010 (as open-ended special AIF): an institutional fund for retail property, “DIC HighStreet Balance,” and two institutional funds for office property, “DIC Office Balance I” and “DIC Office Balance II” Fundraising for the first two funds (now at a combined total of about €520 m) has already hit the 75% mark of its target volume (€700m). The third institutional fund just launched, DIC Office Balance II, brings the minimum target volume up to about €900m.