ActivumSG Capital Management (ASG) has completed the sale of the last German office property owned by funds that it manages as part of a strategic shift towards corporate acquisitions.
In the transaction, ActivumSG Real Estate Fund II has sold the Theo & Luise building in Mannheim, 55 miles south of Frankfurt, to TLG Immobilien for €47.6 mln, reflecting a net initial yield of 5.9%.
The 2011 vintage fund had purchased the 26,000 m2 Grade A property from an affiliate of RBS, which had held it in a non-performing loan portfolio.
'This investment was a lease-up story following the departure of two large tenants, which left us at one point with a 56% vacancy rate,' said Richard Wartenberg, head of Real Estate at ActivumSG Advisory. 'We transformed the property into an institutional quality asset through modernization works and a focused leasing campaign.'
The building is currently 89.4% occupied and the largest tenants are Deutsche Telekom (through Generalmietgesellschaft GMG), Camelot Management Consultants and Euromaster. The property provides parking for 401 vehicles.
'We are very cautious about direct property investments in Germany today,' commented Saul Goldstein, founder and managing partner of ActivumSG. 'This sale ends a successful theme of early ASG funds, where we anticipated that repositioned assets in medium-sized German cities would attract institutional demand as the Big Seven cities got too competitive. Private equity investments or mezzanine lending generally appear the best way to access strong real estate themes in Germany for our newest funds, since their complexity allows us to avoid the crowds and to generate value-add returns for our investors.'
ASG announced in January that its fifth fund has attracted €489 mln of commitments from global investors at its final close for investing in Spain and Germany. The fund started 2018 by acquiring fairvesta, a German real estate fund management platform for retail investors.
Its other investments include mezzanine financing for various developments in Berlin as well as residential development and land purchases in Spain.
ActivumSG Capital Management is a Jersey-based real estate investment manager focused on Germany and Spain. The group was founded in 2007 by Saul Goldstein after he left Cerberus, where he held a variety of senior roles. ASG currently has five discretionary closed-end real estate funds under management with a combined initial equity commitment of €1.5 bn.
