Europe - AEW Europe's pan-European fund has sold its prime retail asset in Hamburg for €94m, proving the German real estate market is still showing signs of activity despite the credit crunch.
The European Property Investors Fund has sold The Alsterhaus, a high street retail property in Hamburg with around 31,000sqm, to a fund managed by German-based IVG Institutional.
Rui Tereso, managing director at AEW Europe and head of Portfolio Management, claimed it showed there is still a strong capital market for retail assets in Germany.
"Generally speaking, I think Germany has been a top investment market with respect to the Eurozone over the last couple of years because it's probably been the most stable market and has shown very good growth characteristics over the past couple of years," said Tereso.
He believes there are still a lot of core capital and equity buyers in Germany ready to invest.
"Equally important, there continues to be demand for top quality assets in Germany, so that is why I think there has been a good amount of activity," Tereso told IPE Real Estate.
AEW Europe, whose availability of capital gives it a competitive advantage in the present climate according to Tereso, is now focusing primarily on investing in the UK, but is also looking to France and the Netherlands.
"We think the UK has been the market which has corrected the quickest, and that is where we are finding the best relative value right now," said Tereso.
Only last week the company's European Property Investors Special Opportunities Fund (EPISO) purchased a state of the art distribution facility in Dartford, Kent, for €68m. The Bridge, a 62,500sqm property developed by ProLogis in 2007, is being leased to supermarket chain Sainsbury's for 18 1/2 years.
"The combination of limited liquidity and the presence of motivated sellers is creating an interesting dynamic for those with access to capital and strong relationships," said Rob Reiskin, head of Investments for Europe.
"In this instance, we were able to buy a prime property at an attractive yield," he added.
The logistics asset's attractive price and low risk-return profile were in line with the company's decision to invest in a "more defensive" way in the current downturn, according to Tereso.
The EPISO fund, which closed in May 2008 with nearly €800m in equity and whose main investors are pan-European pension funds, was able to secure debt financing to make the deal.
The Bridge is the fund's third purchase, following a €140m investment in a diversified UK portfolio made up of retail, office and logistics property and a €145.6m investment in a diversified Paris portfolio in the fourth quarter of 2008.
Last year, the fund embarked on a four-year investment project which it hopes will create a €2.5bn portfolio.
AEW Europe focuses on commingled investment vehicles and real estate securities funds for institutional investors and private clients and has over €17bn of assets under management.
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