TLG buys prominent healthcare property in Berlin for €51m

The Berlin-based TLG Immobilien AG has bought an office property in the Reinickendorf district of Berlin for a total investment of €50.6m.

The Erlenhöfe building on Aroser Allee is primarily let to companies in the healthcare sector, as are several other properties in the vicinity. TLG new tenants will include Vivantes, the largest public group of local medical clinics in Germany, and Vitanas, one of the country's largest operators of elderly care facilities.

The property has an occupancy rate of 88.5%, and generates a net rent of €2.9m a year, reflecting an initial yield of 5.7%, with a weighted average lease term of 4.7 years.

The property comprises 36,700 m2 of lettable space divided into an older section, which was fully renovated in 1993, and an extension completed in 1997, on a campus-style layout. The complex includes a hotel and the former R&D facilities of electrical company AEG.

Niclas Karoff, TLG Immobilien’s CEO, said: "It's not easy to find high-quality office properties at reasonable prices in Berlin right now. This is why we're especially pleased to have been able to land this acquisition in our core market of Berlin."

TLG specialises in investment in the former eastern German states, including many assets in the biggest cities of Berlin, Dresden and Leipzig – in which latter two it has already this year bought a hotel and office complex in Dresden for €28m and an office building in central Leipzig for €57m. At end-December 2015, TLG owned and managed properties valued at €1.77bn, with the EPRA Net Asset Value per share at €17.37.

The share price has nearly doubled to about €18.50 since its flotation in October 2014, and it has been a member of the SDAX for smaller listed companies since February last year. Larger shareholders include Singapore's sovereign wealth fund GIC with 13.3% and Allianz Global Investors with 5.61%. The free float is 81.06%.