EUROPE - Corio, the Dutch property firm 37%-owned by the €220bn ABP pension fund, has sold its Dutch office portfolio for €650m - 1.5% below book value.
The firm has also withdrawn a second, French office portfolio after it failed to attract buyers at the asking price.
The Dutch portfolio, acquired by investment management firm White Estate Investments (WEI), comprises 35 office buildings, 11 industrial assets and parking, with a total lettable floor space of 430,000 m2.
WEI heads a syndicate of five Dutch private investors, which now own most of Corio's €650m Dutch offices and industrial portfolio, after Corio decided to focus on retail with dominant shopping centres in particular. WEI has a 20% stake in the former Corio portfolio while the remaining shares are owned by Galladio Capital Management, Brouwershoff, Janivo and Maarsen Groep.
Corio first put the portfolio on the market in 2003 but withdrew it after deciding renovation would bring a better price. Following a €50m renovation programme, brokers brought the partially-revamped portfolio to market for a second time in November last year.
WEI now intends to divide up the offices and industrial portfolio it recently acquired from property investment company Corio into three propositions and add 10% to the present rental income of approximately €50m of the portfolio, by establishing the Alpha Office fund and the Omega Office fund as well Alpha Industrial fund, according to Robert Kohsiek, WEI's fund and asset manager
"By creating three funds with different risk-return profiles, we want to increase both transparency and the options for investors to select their preferred mix," said Kohsiek.
The acquired portfolio includes landmark buildings, such as the office of the regulator Authority Financial Markets in Amsterdam, the monumental office building at the Churchillplein in The Hague as well as the office cluster Weena Point in Rotterdam.
Under the terms of the deal announced last week, Corio will contribute €2m for additional maintenance work yet to be carried out.
WEI's assets under management will total €1.2bn once the deal completes on 30 September, and will include redevelopment and trade management funds.
According to WEI's fund manager, the company has an investment horizon of five years and has offered to take over the management team of the acquired portfolio.
ABN AMRO analysts were among those who, in December, recommended ABP sell its shareholding in Corio, identifying the firm as a "natural target" for developers. ABP is the only investor with an above-5% shareholding in the firm.
Corio had earlier announced it would sell €1.1bn in office and industrial that makes up just under 20% of a portfolio largely focused on retail in the Netherlands, France, Italy, Spain and Turkey.
However, Corio is not in a hurry to divest its remaining office and industrial objects, totalling approximately €450m, a spokeswoman indicated.
"After the sale to WEI, we now have sufficient liquidity. Therefore, we will sell offices and industrial premises in small clusters or as individual objects, and only if we get an attractive offer," she said.
Corio's remaining industrial portfolio is concentrated in France. The company has kept offices in Utrecht, Almere and Rotterdam, where they are part of large shopping centres.
With assets of €6.5bn, Corio is one of Europe's largest property investment companies and approximately 83% of its portfolio consists of retail centres in the Netherlands, France, Italy, Spain and Turkey.