Germany's Deutsche Gesellschaft für Immobilienfonds (Degi) has become the first German property fund to enter the Romanian property market with the purchase of an office property portfolio in Bucharest, for a investment volume of EUR 111 mln. With a total area of 34,700 m[sup]2[/sup] changing hands, the transaction is the biggest ever on the Romanian office market, Degi said in a statement.

Germany's Deutsche Gesellschaft für Immobilienfonds (Degi) has become the first German property fund to enter the Romanian property market with the purchase of an office property portfolio in Bucharest, for a investment volume of EUR 111 mln. With a total area of 34,700 m2 changing hands, the transaction is the biggest ever on the Romanian office market, Degi said in a statement.

The portfolio includes the 18-storey Millennium office tower and the eight-storey Construdava office building, with a total investment volume of EUR 83 mln. The assets are earmarked for the portfolio of Degi International, which having closed this transaction is broadly diversified with 25 properties in 10 countries. The 10,617 m2 PGV Tower, for a price of EUR 29 mln, goes to the semi-institutional fund Degi Global Business, which thus owns eight properties in seven countries.

'This portfolio deal signifies a swift entry into Romania's dynamic property market for two of our open ended funds, with net initial returns of substantially more than 6%. There is even potential for further increases in rents and value. Following the two property purchases in Poland, this deal is a further step in our investment activities in Eastern Europe,' said Degi's managing director Malcolm Morgan.

The two funds are purchasing the properties through holding companies. The seller is the European Convergence Property Company, listed on the AIM in London. For this transaction, Degi received commercial advice from Eurisko and legal consultancy from the law firm Wolf Theiss.