Real I.S.
Axel Schulz - Real I.S.
‘We were convinced that the mixed use - office, hotel and retail - property we’ve just acquired would be a good investment for our latest fund because it is a multi-tenant property in a prosperous area,’ Axel Schulz, head of investment management at Real I.S., told REFIRE.
German fund manager Real I.S. has snapped up its first property for its Themenfonds Deutschland II fund - an office and retail scheme in Munich with a hotel component - for €190m.
The property was sold by Bürohaus Leuchtenbergring GmbH & Co. Besitz KG, a special purpose vehicle of Münchner Grund Immobilien Bauträger GmbH, itself a subsidiary of Austrian UBM Development AG (UBM). Tenants will include Scout 24 and the Holiday Inn. Real I.S. was advised by Munich-based Noerr LLP and the seller by Munich-based Hermann & Kollegen. The transaction was brokered and supported by Colliers in Munich.
The building, which is due to be completed by mid-2018,will comprise around 35,000 sqm over six upper and two basement floors, including almost 400 parking spaces.
‘We were convinced that the mixed use - office, hotel and retail - property we’ve just acquired would be a good investment for our latest fund because it is a multi-tenant property in a prosperous area,’ Axel Schulz, head of investment management at Real I.S., told REFIRE. ‘In addition, Munich benefits from strong fundamentals.’
Real I.S. Themenfonds Deutschland II AIF was launched in June with a view to developing a diversified office and retail portfolio in Germany, which could be supplemented by residential, hotel and logistics acquisitions. The fund is expected to run for 10 to 12 years, excluding an additional investment phase, and has a target annual return of around 3.5%. The fund will not be more than 50% geared.
So far this year, Real I.S. has invested around €350m in Germany this year, according to Schulz. ‘We are focusing on further deals and are actively looking for other opportunities, especially retail ones,’ he said.
Earlier this month, Real I.S. acquired a project under construction in the Mercedes Platz development at Mühlenstraße 13-15 in Berlin for its BGV VII Europa special real estate AIF for an undisclosed sum. The 10,400 sqm office and retail complex is being developed by Anschutz Entertainment Group. It is due to be completed by the middle of next year. Six of the eight floors have already been let to Zalando. The property will comprise 8,800 sqm of office and 1,600 sqm of retail space. It is being developed by Anschutz Entertainment Group.
The project forms part of the office district along the banks of the River Spree, a new quarter which has been under development since 2014. By 2020, the area is expected to be home to new office, retail and hotel spaces, together with numerous new residential developments. Several large corporations, including Coca-Cola, BASF, Zalando and Daimler AG, have settled in the immediate vicinity of the Mercedes-Benz Arena. Current developments include the East Side Mall and the East Side Tower. Other residential developments have also been given the green light. In addition, a concert hall, cafes, restaurants, bars and two hotels are being built.
‘We see good investment opportunities in the office and retail as well as the hotel sector,’ said Schulz. ‘When it comes to hotels, all ‘Top 7’ cities are attractive, as well as those hosting trade fairs, such as Leipzig.’
The acquisition in Mercedes Platz marks the seventh real estate investment on the part of the BGV VII Europa fund. The fund focuses largely on Germany, France, the Benelux countries, Spain and Ireland. It has a core and core plus investment focus.
Real I.S. is the real estate fund provider for lender BayernLB. The group had around €7.5b of AUM as of end-June 2017.