Dream Global REIT has formed a joint venture with South Korean pension fund POBA under which the fund will acquire a 50% interest in seven of the Canadian company’s German office properties for around €221 mln.

Dream Global REIT has formed a joint venture with South Korean pension fund POBA under which the fund will acquire a 50% interest in seven of the Canadian company’s German office properties for around €221 mln.

The seven properties are the ABC Bogen in Hamburg, Löwenkontor in Berlin, Werfthaus and K26 in Frankfurt, doubleU in Düsseldorf, Z-Up in Stuttgart and Marsstrasse 20-22 in Munich. The transaction reflects a net initial yield of 5.3%.

Dream Global (formerly Dundee International REIT) said it plans to reinvest the net proceeds from the sale in office properties in its target markets.

'This joint venture offers us the opportunity to diversify our sources of capital, to leverage our REIT operating platform by generating joint venture management income and to continue to take advantage of the attractive investment environment,' said Jane Gavan, CEO of Dream Global REIT.

POBA (Public Officials Benefit Association) is a South Korean pension fund for government officials with 235,000 participants and one of the most active overseas real estate investors in South Korea. Since it was founded in 1975, it has built a global commercial real estate portfolio that includes assets in England, China and Brazil.

Together with the announcement of the joint venture, Dream Global REIT said it had completed the acquisition of the Officium office property in Stuttgart for €46.9 mln, reflecting a net initial yield of 6.6%. The 25,900 m2 property is let to multiple tenants including AXA, Deutsche Sparkassen and Oracle.

‘The opportunities in Germany are plentiful and strategic partners like POBA will help us grow in Germany and potentially elsewhere when we identify appropriate opportunities,’ said Michael Cooper, vice chair of the board of trustees of Dream Global REIT.