Real I.S. tops €1bn in acquisitions this year

The BayernLB real estate funds subsidiary Real I.S. is on target to have acquired €1bn worth of property this year, ahead of even the €877m it invested in its record last year of 2016. The Bavarian group, which focuses on commercial assets in the core/core-plus category, has concentrated most of its activities this year in Europe – particularly Germany, Ireland and the Netherlands, where it recently established a management office.

On the selling side, Real I.S. has been offloading older assets in Germany, France and Canada, altogether reducing its exposure to North America, and winding down mature institutional funds like its 10-year-old BGV III fund.

High on the fund manager's priority list this year was the Spezialfonds BGV VII, which is targeting a volume of €1bn, with equity of €600m. Of that, €450m has already been raised from Sparkassen, insurers, pension funds, private and cooperative banks, and corporations.

Real I.S. has also been offering German investors exposure to the Australian market, where it claims it can achieve returns of 4.5% where Germany would yield only 3.5%.

Although it didn't buy any new assets there this year, it plans to intensify investment through its public Australien 10 mutual fund with up to Aus$50m equity and a 4.5% dividend yield.

Also coming on stream in 2018 is BGV VIII, focusing on commercial property in central and western Europe offering at least a 3% yield for offices, and 4% for retail, logistic and hotel assets. For offices and retail, Spain is of particular interest, where Real I.S. is also opening a branch office.

Just this week Real I.S. bought the 6,900-sqm Merchants Quay Shopping Centre in Cork, Ireland from Kennedy Wilson for its BGV VI fund. Anchor tenant in the centre is Marks & Spencer with a 70-year lease.