Cain International is buying a 50% stake in a Munich office development project as its debut transaction in the German market.

The real estate manager said its European Real Estate Opportunity Fund I fund has agreed to buy half of the 80,400sqm office development known as Koryfeum in a joint venture with FREO Group, with whom Cain already has existing joint ventures in Spain and France

The first phase of the Koryfeum project is due for delivery in the second half of next year. In total, the project comprises six buildings.

Daniel Harris, the head of European Investments at Cain International, said: “This acquisition represented a unique opportunity to enter an attractive submarket and work alongside an established partner to develop a best-in-class innovative office campus.”

Harris said sentiment around the German market has remained positive throughout the pandemic, while Munich, in particular, has seen a high level of investor interest as a result of its limited high-quality vacant space and stable rental prices.

He added: “It is a market that aligns with our investment strategy to focus on European gateway cities and one that we enter with great confidence in its long-term prospects.”

Cain’s European Real Estate Opportunity Fund I closed in May with €324m in capital from its investors including €70m from Goldman Sachs’ Vintage Funds. Cain said the fund has invested 82% of the commitments across several European gateway cities, including Dublin, Paris, and Madrid as well as projects in Krakow and Warsaw.

Jan Heidelmann, managing director of FREO Germany, said: “We first acquired this site having recognised the incredibly strong fundamentals offered by its location.

“This area of Munich is becoming more and more renowned as an innovation and technology hub, while the city more generally has almost no vacant space, generating demand for high quality and sustainable office space – a trend that has only been accelerated by the Covid-19 pandemic.

“Following joint ventures in Spain and France we are pleased to partner with Cain in this exciting project, particularly as they make their debut into Germany, a market that is central to the history of the FREO Group.”

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