REAL ESTATE – German real estate firm DIC Asset AG said it has invested €460m to acquire 26 commercial properties in Germany from SEB Asset Management.
DIC said the €460m covered both the purchase price of the properties and costs related to the transaction. DIC’s acquisition of the properties followed a bid of prospective buyers conducted by CB Richard Ellis.
DIC said the properties were well diversified in terms of location and nature. The properties are located in at least seven different German cities. They are also 60% office-use, 18% retail use and the rest other commercial use including that for logistical.
DIC also said the properties were rented to clients with excellent creditworthiness, adding that cash flow from the rents would total €26.5m annually.
The properties are not fully rented however. DIC said it planned to reduce the vacancy rate to 15% from 18% currently.
"The acquisition of this high-quality portfolio marks the implementation of our strategy of significantly increasing our presence in the domestic market," commented Ulrich Höller, DIC’s chief executive.
"This year alone, we are planning to make further acquisitions with a total investment volume of €1bn," Höller added.
SEB AM’s German arm, which provides three open-ended real estate funds, said the vehicles still owned 50 commercial properties in Germany whose worth was €1.7bn.
"It was particularly important for us to reduce the share of smaller objects in the funds. The sale will have a positive effect on the performance of the funds," said Barbara Knoflach, chief executive of SEB AM’s German arm.
Founded in 2002, Frankfurt-based DIC is a specialist in German commercial real estate. It is traded on Germany’s small-cap SDax index.
In December, Germany’s NAEV, a medical pension fund which allocates 4% of its €7.75bn in assets to real estate, disclosed that it held a 10% stake in DIC.