A Tristan Capital Partners core-plus fund has acquired the entire portfolio of AEW’s German cities office fund.
The Curzon Capital Partners 5 LL fund has paid an undisclosed amount to buy the AEW City Office Germany Fund’s 83,064sqm portfolio of seven office buildings.
The portfolio, known as the Selection Portfolio, includes two separate facilities in Cologne and individual sites in Berlin, Frankfurt, Munich, Hamburg and Dusseldorf.
Tristan said the operating partner for the acquisition of the portfolio will be Barings Real Estate.
Constantin Plenge, managing director at Tristan Capital Partners, said: “Germany looks set to be one of the markets that recovers fastest from the coronavirus crisis, as the underlying fundamentals across the top six markets remain strong and unemployment is currently at around 4%.
“We believe that we will see sustained demand for high-quality office space in prime locations in Germany over the next few years and that the ongoing demand and supply imbalance will outweigh any short-term, incremental rise in vacancy in the immediate wake of the current crisis. Furthermore, given the location and physical quality of each of the individual properties, we expect that they would be first to re-emerge following any market volatility.”
Christoph Wittkop, managing director and country head at Barings Real Estate, said: “We have worked with Tristan Capital since 2011 and our teams are used to working together on both the transaction and asset management side.
”The locations, tenant structure, rental level, occupancy rate and condition of the buildings are good across all of these assets, which is even more important than usual in the current environment.”
Marc Langenbach, head of funds and separate accounts Germany, from AEW said the strategy was to carefully assemble a set of well-located offices in six of Germany’s major cities, where AEW could add value through active asset management, including repositioning and leasing to drive the capital value and income quality of the properties.
“We think it is the right time to crystallise the value for our investors who signed up for the fund in the first subscription phase.
“I’m pleased that the success of the strategy means that we have already been able to secure capital commitments for the next fund in the series, the AEW City Office Germany II, for which we are actively building a pipeline of potential investments.”
Lars-Henning Pylla, fund manager at AEW, said: “We are pleased that despite the current volatile market environment in times of COVID-19, we have successfully completed a transaction of this size through focused portfolio steering and, at the same time, achieved an exceptionally good performance for our investors.”
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