Tristan EPISO fund buying in Berlin, Munich

Pan-European real estate investment manager Tristan Capital Partners has bought a portfolio of 14 mixed-use buildings mainly in Berlin from funds managed by Germany’s DG Anlage Gesellschaft for €117.5m.

The purchase means that 85% of the €950 million in equity raised by the European Property Investors Special Opportunities 3 fund (“EPISO 3“) following its final close in January 2014 are already committed, or earmarked for investments currently under exclusivity pending a contract agreement.

The portfolio acquired by EPISO 3 from three funds managed by DG Anlage Gesellschaft mbH comprises 93,280 sqm of lettable space, more than three quarters of which is in Berlin, Leipzig or Frankfurt, markets that offer substantial investor liquidity for stabilized properties. Offices make up 60% of the 14 assets, with 17% of space occupied by retailers Aldi, Rewe and local branches of Targo Bank and Deutsche Bank. The rest of the portfolio comprises residential assets and other uses with a total vacancy of 13%.

EPISO 3 partnered with caleus capital investors, which is advising on asset management on the ground as well as tenant relationships and execution of the repositioning initiatives. caleus will also act as a co-investor, as it has done in a string of prior successful investments in Germany by funds advised by Tristan Capital.

Earlier this month Tristan confirmed a deal which REFIRE believes was concluded several months ago (possibly waiting to establish solid financing for the project?). The same EPISO 3 opportunity fund, bought the landmark Karstadt department store building opposite Munich main train station, in a joint venture with Ireland’s Signature Capital, for an undisclosed price. Since signing the deal, the joint venture partners have secured a €130m loan from HSH Nordbank to finance the purchase of the 93,000 sqm property. Karstadt remains the sole tenant on a long lease.

The property is unusual in that it has two connecting parts, housing one of the largest contiguous retail spaces in the city. It fronts on one side onto the main train station, while the more modern part fronts onto the two streets that link the station to the famous Karlsplatz, at Stachus.