PGGM and Rockspring Property Investment Managers have launched a joint venture to invest in offices aimed that serve the burgeoning technology and media industry in Berlin.

The €206bn Dutch pensions group and the UK-headquartered fund manager said they have provided an initial €250m of capital with which to invest in modern, flexible office space in “tech hot spots” in the German capital.

The joint venture has already acquired an asset in Kreuzberg and expects to close four to six transactions over the next 18 months.

It will focus on existing assets that can be improved in terms of sustainability and healthy working environments.

Rockspring’s Berlin office will source and manage the portfolio.

The asset in Kreuzberg is a former factory site, comprising a seven-storey building with 9,270sqm of space.

Rockspring said it is fully let to a range of tenants on short-term leases at relatively low rents.

The property includes an undeveloped site with a building permit for 5,520sqm of lettable space, where construction is scheduled to start at the end of 2017.

The joint venture is focused on achieving a low carbon footprint for the site, including the new building.

The joint venture builds on an ongoing partnership between PGGM and Rockspring that has invested €950m in German real estate over the past 20 years.

Thijs van Gelder, director of PGGM Private Real Estate, said: “We are extremely pleased with this next step in our partnership with Rockspring.

“The economical and demographical developments are making Berlin a very attractive location for young and highly educated people and fast growing tech companies.

“This results in strong demand for modern office space. As the supply is limited, this partnership will focus on creating additional space and increase the sustainable performance of the assets and take care of the wellbeing of its tenants.’’

Guido Verhoef, head of PGGM Private Real Estate, said: “The investment strategy is part of our broader European office strategy.

“We want to combine attractive financial returns while making office buildings which are located in upcoming locations more energy efficient.

“The chosen partnership model offers the opportunity to adequately time the investment decision, which is crucial to successfully invest in a cyclical sector like offices.’’

Paul Hampton, partner at Rockspring, said: “We have carried out extensive research into the increasing demand for space from the growing TMT sector in Berlin and, combined with a recently expanded team of asset managers and transaction professionals headquartered in Berlin, we are excited about the prospects for this programme.”