GERMANY - ING Real Estate has allocated Germany as the most important market for its European Office Fund, fund manager Leo Weidenaar said.

"Since its economy is recovering very fast, Germany offers big opportunities. After entering the German market last year, we have already invested €150m," he added.

The fund recently acquired an €28.5m property of 5,500 m2 in a prime corner location in Frankfurt’s central business district, "providing excellent exposure to Frankfurt’s banking quarter", according to ING.

"The property will add considerable value to the fund, given that rental growth is expected to be high, and both yields and property value in the Frankfurt area are expected to further increase in the coming years," Weidenaar said.

ING’s European Office Fund has already acquired properties in Munich and Frankfurt, with a contract to be signed for the purchase of an office in Hamburg next week, the fund manager indicated.

Most recently, the fund purchased the Altezza office development in the Westend district of Munich for an undisclosed sum. The property – to be delivered in the first quarter of 2009 – will include approximately 2,200 m2 of floor space and 283 parking spaces. It will feature modern architecture and design by A+P Architects, ING said.

Following the purchase of the landmark WestendDuo high rise towers in Frankfurt, the Altezza project is ING’s second transaction with Hochtief Group.

According to Weidenaar, his fund will now focus its search for new properties in the Ruhr area.

"Berlin is also on our priority list. But we think that the attractive investment opportunities there are limited, because its hinterland is relatively not the strongest in Germany," he explained.

Weidenaar expects to acquire another €150m of properties in Germany in the near future. The office fund, which also invests in Italy, Belgium, France and Spain, comprises of €700m of real estate. About three-quarters has been invested by institutional investors, he reckons.

"We expect to reach €1bn next year," the fund manager said.