French private equity firm Eurazeo has made its first foray in the German property market with the acquisition of a portfolio of six mixed-use commercial properties in Berlin from Gewerbesiedlungs-Gesellschaft mbH (GSG Berlin), a subsidiary of CPI Property Group. Financial details were not disclosed.
The portfolio comprises 34,000 m2 of lettable space in sought-after ‘loft style’ brick buildings, across the Berlin submarkets of Kreuzberg, Schöneberg, Neukölln and Reinickendorf. The assets, located in supply constrained submarkets with rental levels which are below market rents, are ideal candidates for a refurbishment / (re)-development strategy, the buyer said in a statement.
Eurazeo has committed €74 mln of equity to the investment including plans to undertake a selective capex programme to modernize the assets and improve their sustainability profiles.
The transaction marks the first German investment in Eurazeo’s latest pan-European real estate investment programme, Eurazeo European Real Estate II, which is now deployed across all its core markets including France, the United Kingdom, Spain and Italy.
So far Eurazeo European Real Estate II has made seven investments since it launched in 2020, which includes a UK multi-let portfolio in locations in and around London, a Spanish hotel portfolio primarily located in Madrid and Barcelona and an office campus in the well-established London office submarket of Farringdon.
Eurazeo is working on this transaction with operating partner Arax Properties.
Renaud Haberkorn, nanaging partner of Eurazeo, Head of the Real Assets, said: ‘As the Berlin real estate market starts to mature, the focus shifts away from market headline growth to value creation via granular asset management. We have identified various levers to create additional value within this mixed-use portfolio, through site (re-)developments, densification and significant renovation of existing units.’
