SEB presses ahead with major sales from dissolving fund

SEB Asset Management is going full steam ahead in selling off assets in its dissolving open-ended fund SEB ImmoInvest to generate liquidity to pay off shareholders. Earlier this month the group signed a purchase agreement worth around €420m with acquisitive Canadian REIT Dundee International for a package of eleven different properties with 137,000 sqm of lettable space, located right across the country.

While Dundee is still putting the final touches to its financing package, the deal is expected to go through by the end of next month. The broad spread of properties will help the REIT to reduce its dependency on the Deutsche Post portfolio with which it started its German buying spree a couple of years ago, and which still makes up 85% of its rental income. With further acquisitions of about €195m in 2012 and other planned commitments in Munich and Berlin in the pipeline, this deal will help to reduce that to the targeted 42% by the end of this year. The Toronto-listed REIT is invested exclusively in German property.

The package signed with Dundee comprises a broad mix of properties with different locations, age structures, sizes, letting rates and lease terms. Two of the eleven buildings (Cologne and Nuremberg) are part of the portfolio belonging to the semi-institutional real estate fund SEB ImmoPortfolio Target Return Fund. SEB ImmoInvest’s nine office properties are located in Frankfurt, Hamburg, Stuttgart, Düsseldorf and Munich, as well as in the regional centres of Freiburg and Mannheim.

SEB also closed on the sale of the five-star Grand Hyatt Hotel in Berlin, part of its 19-building ensemble on Potsdamer Platz that proved so troublesome to find a full or partial buyer for while the SEB ImmoInvest fund was still active until the middle of last year. The buyer is Al Rayyan Tourism and Investment, a division of Middle Eastern investment group Al Faisal Holding.