Aggregate Holdings has announced the sale of three segments of Berlin’s Quartier Heidestrasse development project for a gross purchase price of €488 mln, representing a premium to its externally appraised gross development value.
The assets are sold to a consortium led by Imfarr, a family-owned real estate development and investment office. The three Quartier Heidestrasse segments - QH Colonnades, QH Straight and QH Crown 2 - have a combined gross construction area of 91,668 m2 and lettable area of 52,407 m2.
The properties are already more than 65% completed, with remaining construction works to be completed by Q2 2023. The assets are expected to generate a combined rental income of €15 mln per annum.
‘The sale demonstrates the strong underlying value of QH as a prime asset that is located ten minutes walking distance from Berlin’s government district’, Aggregate said in a statement.
In September, Aggregate leased 23,000 m2 in QH Track to a major DAX40 group that became the second largest QH tenant behind SAP, which has leased 37,000 m2 also in QH Track. QH Track is the largest building unit in Quartier Heidestrasse and a pure-play office building that spans over 160,000 m2 of gross construction area and 111,000 m2 net lettable area. With a combined pre-let area of 72,000 m2, QH Track has already achieved a total pre-let ratio of 65% and an expected rental income of €45 mln per annum.
The transaction is structured as a sale of the 4 Ensembles holding company which consists of QH Colonnades, QH Straight, QH Crown 2 and QH Spring. The net sale proceeds will be used to further repay debt at QH, and the transaction in whole will reduce QH Group gross debt by €360 mln.
In September Aggregate also announced the sale of another Quartier Heidestrasse segment known as QH Spring to Vivion Investments S.à.r.l., with the deal expected to close by January 2023. Following completion of these deals, Aggregate will have sold five segments of QH for a combined value of €950 mln, representing one third of the value of the project. Aggregate and the existing project manager will continue to develop and manage the assets until completion.
‘The continued interest in Quartier Heidestrasse, in this challenging transaction environment, demonstrates the quality and attractiveness of prime Berlin assets. Our buyer will benefit from rising rental income and appreciating asset values over the coming years. This transaction reiterates our value expectations for the remaining segments and provides strong progress on deleveraging our capital structure to gain the financial strength to take advantage of future opportunities,’ commented Cevdet Caner, Chief Executive Officer of Aggregate Holdings.
