GERMANY - A three-way German office partnership involving ABP and ATP Ejendomme, the real estate subsidiary of the €49.6bn Danish pension scheme, has invested almost a third of its target capital with the €200m acquisition of two nationwide portfolios.
Patrizia, the third partner and discretionary manager of the Patroffice joint venture, acquired 32 commercial properties across 25 cities from Deutsche Bank real estate subsidiary RREEF, and a mixed office and residential portfolio from a private, unnamed investor. The 11,000m3 incidental residential component came with a portfolio that also included four commercial properties in Munich, Frankfurt and Wetzlar.
Managing director Martin Lemke described the residential as "the ugly sister who came to the party" - despite Patrizia's long-standing specialism in German housing.
Lemke declined to be drawn on timelines for investment of the partners' remaining capital but the vehicle has a target size of €700m.
"I'm not sure we'll be able to close another deal this year. If it's a large portfolio with a strong pipeline, it could happen quite quickly," he said.
"It's hard to predict. It can be quite easy if it's the right deal. It isn't our focus to spend the lot in one transaction. Smaller deals could be fine, though if it's a bigger one - good."
He said private investors with smaller portfolios would be reassured by the backing of pension scheme capital in the venture.
"Private vendors know we're here [as a result of the mixed-property deal]. They're reassured there's institutional backing - it gives them a cushion when they see two pension funds behind you.
"Our capital capability is supporting our plans rather than working against us," he added. The high-leverage buyers have gone, and financial games are difficult to play. It all comes down to liquidity. When you're able to show €200m, you have an advantage."
The €215bn Dutch pension fund ABP and ATP each contributed €60m and pledged additional capital of €40m each to the joint venture when it launched in April. Patrizia contributed €8m.
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