Long Harbour’s European ground lease fund has made €38.6m worth of freehold investments in Dublin and Frankfurt as its first acquisitions.
The Long Harbour Euro Secured Income Fund 1 (LHESIF 1) has bought the freehold of a hospitality asset in central Dublin for €6m, in partnership with a third-party private equity investor which acquired the leasehold on a 100-year lease. The total value of the asset was €16m.
Long Harbour said the fund has also invested €30m to acquire the freehold of The Access Tower office asset located in the Niederrad district of Frankfurt. The freehold was acquired with Publity the existing building owner, retaining the leasehold on a 100-year lease. Long Harbour partnered with Continuum Capital in Frankfurt on this transaction.
The manager said it has also exchanged contracts on a further ground lease deal for a hotel in Munich, which will complete in the second quarter of the year, also in partnership with Continuum Capital.
The LHESIF I fund was launched in November 2019 with initial commitments of €400m and a mandate to deploy capital into commercial and residential ground lease deals in strong European markets.
Richard Silva, fund manager for the Long Harbour European Secured Income Fund, said: “The interest we have seen so far in ground lease deals is very promising and underlines the strength of the ground lease structure and its potential in Europe, particularly for commercial assets.
“We are in active discussions on further deals and will be looking to broaden our portfolio in Germany and Ireland, as well as to make further acquisitions in The Netherlands and The Nordics.”
William Astor, CEO at Long Harbour, said: “The current macro environment has only further strengthened the attraction to long-income for investors seeking an alternative to bonds, while developers and landlords are looking for alternatives to traditional finance.
“This a relatively new market in continental Europe but one which is rapidly opening up and we expect to make more ground lease investments in key markets this year.”
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