US investor Ares Management has inked its second European portfolio acquisition since the start of the year with the purchase of a German package of 303 residential and 28 commercial units, totalling 22,000 m2 of lettable space.
US investor Ares Management has inked its second European portfolio acquisition since the start of the year with the purchase of a German package of 303 residential and 28 commercial units, totalling 22,000 m2 of lettable space.
The properties are located in North Rhine-Westphalia and were acquired from a fund managed by Norway-based Obligo Investment Management. Ares now owns more than 2,000 units across Germany.
Financial details of the transaction were not disclosed.
This transaction is the first add-on acquisition for Ares’ existing residential real estate portfolio in Germany, which consists of almost 1,700 units totaling 108,807 m2 located across several large cities in west and northwest Germany.
'Ares’ commitment to the German residential market is further bolstered by this transaction,' said Bill Benjamin, senior partner of the Ares Real Estate Group and head of Europe and India Real Estate. 'We remained highly interested in this portion of the residential market in Germany due to the economic fundamentals that support continued strength in the rental market as well as the depth in the number of institutional investors for properties in this asset class.'
Ares will continue to work with Forte Capital, a Frankfurt-based real estate firm that Ares partnered with to acquire and manage its first German residential investment, in order to add value and reposition the expanded portfolio.
In February Ares bought a 45,000 m2 office and retail portfolio located across five European countries from IVG Institutional Funds.
The deal, valued at more than €100 mln, represents one of the first multi-country portfolio sales since the financial crisis more than six years ago. The eight properties in question are located in the UK, Germany, Sweden, Poland and the Netherlands.
Ares raised $1.3 bn (€1.1 bn) in January for a new European commercial real estate fund with a value-add/opportunistic risk profile. The alternative investment manager said that Ares European Real Estate Fund series significantly exceeded its fundraising target of $1 bn, reflecting the strong interest in European real estate on the part of US institutions looking to take advantage of further rental growth and yield compression expected in Europe.
The $1.3 bn Ares European Real Estate Fund IV targets investments in residential, retail, office and industrial real estate located in major European markets, including the UK, Germany, and France.
Ares Management’s Real Estate Group manages a variety of public and private equity and debt strategies, with $9.6 bn of assets under management as of 30 September 2014 on a pro forma basis including these two fund closings. The group focuses on lending to and investing in properties that have been under-managed or need repositioning in core markets.
The group is mulling the launch of a European real estate debt fund, Bill Benjamin, senior partner at Ares Real Estate Group, recently told PropertyEU. ‘Over the past 14 years, we have raised $3 bn of equity, including co-investments, to invest in opportunistic European real estate. Now, our plan is to get into European real estate lending, which is a natural extension for us,' he said.
Its European real estate lending unit will be based in London and will lend on assets in both the UK and continental Europe, according to Benjamin, who is also based in London.
