LaSalle Investment Management has acquired a Munich office portfolio for €169m for its pan-European core real estate fund.

The ElseBella portfolio, which includes properties in the Westend and Arabellapark districts of Munich, was sold by AXA Investment Managers–Real Assets.

The open-ended Encore+ fund, for which LaSalle assumed full control in November, now has a net asset value of €2.1bn, according to a source with knowledge of the matter.

David Ironside, fund manager of Encore+, said LaSalle was focusing on office markets in Europe “where we can get significant rental growth over time”, especially those that produce “very limited new supply” of new buildings.

“Munich, of all the markets, is probably the best [example] on a long-term, basis because the supply of land is so low, and because the height restrictions are so strict it basically means it is very difficult to create new space.”

The portfolio acquired includes two buildings encompassing 25,000sqm of space in Munich’s Westend district, a major office location adjacent to the central business district (CBD).

The other asset, Bella, is a 15,000sqm, seven-storey building in Arabellapark, northeast of the CBD.

LaSalle said both submarkets were “subject to particularly high take-up levels and limited immediate and future supply”.