Florian Glock - REFIRE
Stuart Reid - Rockspring
Stuart Reid, Rockspring partner in charge of Germany and long-term Berlin resident, added, “Berlin has really moved on from 2004 when the town mayor described the city as ‘poor but sexy’."
Co-operative Dutch pension fund manager PGGM and Rockspring Property Investment Managers have committed to their first deal as part of their joint venture to invest in high-tech hot spots in Berlin. The €206bn Dutch pension group and the UK-headquartered fund manager have an initial fund of €250m to invest in modern, flexible office space in the German capital suitable to tech and new media startups.
The fund's first acquisition is a seven-storey former factory site in Kreuzberg with 9,270 sqm of space, fully-let to a range of tenants on short-term leases at relatively low rents. It includes an undevelped site with planning permission for a further 5,520 sqm of lettable space, and construction will start at the end of this year.
The joint venture said it expects to close on four to six transaction over the next 18 months, with the focus on existing assets, that can be upgraded in sustainability and healthy working environments, and geographically on key locations like Kreuzberg, Mitte, Friedrichshain and Mediaspree. Rockspring's Berlin office is spearheading the sourcing and will handle asset management for the portfolio.
The two companies know each other well, and have been partners in German retail real estate for 20 years, investing over €950m in Germany together in that time.
According to Thijs van Gelder, director of PGGM Private Real Estate, “The economical and demographical developments are making Berlin a very attractive location for young and highly educated people and fast growing tech companies.
This results in strong demand for modern office space. As the supply is limited, this partnership will focus on creating additional space and increase the sustainable performance of the assets and take care of the wellbeing of its tenants."
Stuart Reid, Rockspring partner in charge of Germany and long-term Berlin resident, added, “Berlin has really moved on from 2004 when the town mayor described the city as ‘poor but sexy’. The capital is now coming of age and offers huge future potential based off a relatively low capital value base. There is no other European city with such strong net office absorption and population, job and business growth.
"Berlin is the first truly international German city and is destined to be the winner as new and established businesses battle it out across Europe in the ‘search for and retention of talent’. Berlin offers a lot of advantages including a relatively low cost of living, a multi-cultural population base, ease of living and working in English (or other foreign languages) and has a very strong restaurant, night life and cultural scene – major advantages to the younger employment base.”
