Global real estate investor AEW has completed the second disposal on behalf of its Europe Value Partners fund, an office asset in Dresden.
The property was acquired in December 2018 in a JV with Catella Asset Management Germany (CAM) and was sold to a private German investor.
Financial details were not disclosed.
The asset is located on Blasewitzer Strasse, east of Dresden city centre, and comprises a total lettable area of approximately 16,200 m2 over five floors together with 170 basement car parking spaces. At the time of acquisition, the office was significantly under-rented, according to AEW.
Russell Jewell, AEW's head of private equity real estate, said: 'This early disposal has delivered above expectations and underscores our conviction that the European market continues to offer value add opportunities for investors provided you have the capability and network to access them.
'While transaction negotiations were underway before the onset of the Covid-19 pandemic, we’re pleased that it did not impact our ability to complete efficiently and deliver attractive returns. Following another office disposal in Utrecht, the fund has now returned c.65% of the original equity to investors.'
During the 15 months of ownership, AEW said it renegotiated 70% of the leases, increasing the weighted average unexpired lease term from 3.5 to 5 years and establishing estimated rental values some 50% above passing rents at time of purchase.
Andreas Hauff, managing director of CAM Germany, added: 'Based on our experience in value add investments in general and our expertise in the Dresden market we were able to execute the business plan much faster than predicted. The now stabilised asset will be an excellent long-term investment in one of Germany’s dynamic cities.'
AEW and CAM were advised by Norton Rose.
