KanAm buys in Scotland, launches third JV with Pantera

German fund manager KanAm Grund Group said it had bought a mixed–use asset in the Scottish capital Edinburgh on behalf of a German pension fund, die Ärzteversorgung Westfalen-Lippe (ÄVWL), from anchor tenant Aberdeen Standard Investments (ASI). The price was put at about €140m.

The ÄVWL is an institution of the Medical Association of Westphalia-Lippe and is one of Germany’s largest occupational pension funds. With current assets under management of €13.8bn, including real estate investments of around €3.0bn (equity at market values), the ÄVWL is responsible for the pensions of 60,000 members and retirees.

Located at 4-8 St Andrew Square, the asset comprises office space, restaurants and a retail outlet. Fully let on long-term leases, the 17,000 sqm property was completed in 2016 with a BREEAM excellent rating on behalf of the Standard Life Pooled Property Pension Fund. The tenant Standard Life Aberdeen, use the property as their Scottish headquarters. Further tenants include retail chain TK Maxx, plus restaurants The Refinery, The Ivy, Vapiano, Wagamama and Gaucho.

4-8 St Andrew Square is part of a substantial mixed-use asset assembled by ASI and developed by them in conjunction with Peveril Securities. The property is within direct proximity of the new James shopping centre, which is due to open next year.

David Stewart, fund manager, Aberdeen Standard Investments, said: “The development and sale has been a resounding financial success for investors within the Standard Life Pooled Pension Property Fund.”

KanAm Grund executed the deal through the investment and asset management platform KanAm Grund REAM and will also be in charge of the asset management.

Separately, KanAm also launched its third joint venture project with the Cologne-based developer Pantera AG, a serviced apartment complex in Munich East. The project, for KanAm Grund’s €700m German Development Fund, will comprise around 80 serviced apartments, a restaurant and underground parking on the site of an existing property owned by Pantera Mikro München III.

The target investment volume of the KanAm Grund German development fund, which was launched in 2018, is around €700 mln with a three year horizon. The fund is managed by Augeo Capital Management SA (formerly Warburg Invest Luxembourg) as alternative investment fund manager.

Under the terms of the deal, the KanAm fund will finance the property purchase and provide the required equity and mezzanine capital, while Pantera will be responsible for the conceptual design and management of the technical and planning aspects. KanAm Grund will act as investment advisor. Once the concept design is completed, the fund aims to sell the property to institutional investors.

KanAm's other two development projects with Pantera include 121 micro-apartments in Esslingen near Stuttgart, and the construction of 200 serviced apartments at Gutleutstrasse in the center of Frankfurt am Main.

The German fund manager said it has also acquired another development scheme, the Da Vinci Campus office, from CV Projektentwicklung for the same fund. This scheme comprises around 20,000 sqm and is also located in Munich East.