M&G extends shopping spree with €94m Berlin office buy

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M&G Real Estate has bought a central Berlin office asset for €94.1m from an entity managed by JP Morgan Asset Management. The real estate fund management arm of M&G Investments, which itself is part of Prudential Insurance, has been on a multi-million shopping spree in Germany since the biginning of the year.

The 22,521 sqm complex of two adjoining buildings in Badensche Strasse in the Wilmersdorf district, is let to tenants including the Institute for Federal Real Estate and Paypal.

David Jackson, fund manager at M&G Real Estate, commented: “Key markets in Europe, and especially Germany, are now experiencing stronger tenant demand and take up, which is fuelling rental growth. As such, core assets in prime locations in Germany continue to be of interest to our pan-European strategy, as evidenced by our new acquisitions, on the back of a trio of purchases in the country in February.”

Jackson said M&G has bolstered its investment capability in continental Europe, opening new offices and making senior appointments. The company's European core property strategy has deployed over €1bn of capital since March 2015, with acquisitions made in Denmark, France, Germany, Italy and Portugal.

In Cologne, M&G Real Estate said it had secured a new tenant for its office asset in central Cologne in the form of a department of the German federal government. The 20,413 sqm office building was formerly the headquarters of Lufthansa.

Earlier this year, M&G Real Estate invested €140m in the 34,400-sqm Luisenforum Shopping Centre and office complex in Wiesbaden. The shopping centre with around 50 shops opened in 2008, and anchor tenants include Saturn, TK Maxx, dm, Rewe, Gant, and Gerry Weber, who generate rental income of around €7.7mn annually. The average remaining lease term is about six years. In addition to the 19,000 sqm retail space, the property offers about 12,200 sqm office space and 800 parking spaces.