Hines, through its new value-add fund, has expanded its Munich office portfolio with the acquisition of two office buildings.
The global real estate fund manager’s Hines European Value Fund (HEVF) 2 fund has bought the two buildings comprising of over 87,000sqm of office space on Fritz-Schäffer-Straße 9 for an undisclosed sum.
The asset is currently fully let to Allianz.
Hines said it will design and seek building permits for a comprehensive refurbishment programme to transform the asset into an office-led, mixed-use scheme, including residential.
Paul White, HEVF 2 fund manager, said: “We are delighted to have made a significant investment for HEVF 2 into the Munich office sector, a market we have been actively targeting for some time.”
“Munich benefits from some of the strongest office fundamentals in Europe today, with demand also exceeding available volume and quality of space in the residential sector.”
Christian Meister, managing director for Hines Germany, said the office occupier market in Munich is exceptionally strong, and Fritz 9’s location makes it an attractive location for a sustainable office-led mixed-use campus.
“We will significantly improve and re-launch the Fritz 9 location and we will aim to attract a strong and vibrant tenant mix, Meister said.
“As always, we are determined to enhance the community in which the asset is located, and we are pleased to be a part of Munich’s exciting and dynamic market.”
The HEVF 2 fund raised €637m at the first closing in December 2019, exceeding 50% of the €1.25bn total fund target. With leverage, the fund is expected to have a €3bn purchasing power.
The predecessor HEVF 1 fund raised €721m in August 2018.