German Estate Group (GEG), a Frankfurt-based property firm owned by asset manager DIC and private equity firm KKR, said on Tuesday that it will take over a major campus development project in Munich for its long-term investment portfolio.
The company is buying the Junges Quartier Obersendling property from a syndicate of a Morgan Stanley Real Estate Investing fund and GEG's shareholder DIC, for a total investment of €170 mln.
The acquisition was made on behalf of GEG's Public Infrastructure 1 open-ended fund, advised by GEG and managed by Hamburg-based Hanseatische Investment.
Originally built in 1960, the campus provides 45,000 m2 of total rentable space occupied on a long term basis by the City of Munich, which will use the property for the education and training - as well as the integration - of young people with special needs.
MSREI and DIC had acquired the former office complex from Siemens in 2007. When Siemens vacated the site in 2015, the owners decided to re-position and re-develop the property and retained GEG to manage the project.
Construction of the five separate campus buildings is already underway. Around 45% of the space has been earmarked for training facilities, with around 30% for offices and administration space, and 25% for residential use. Tenants will move into the first parts of the buildings during 2018, with the entire complex expected to be completed during the first half of 2019 at the latest.
Ulrich Höller, Chairman of the Management Board of GEG, said: 'With the campus we have developed, we acquired a top real estate investment for our new fund vehicle. 'Junges Quartier Obersendling' is a first-class model project where – together with the City of Munich – we are making a relevant, exemplary contribution towards improving the education and integration of young people – at the same time, the property will generate an attractive long-term return for our co-investors and ourselves, through the fund.'
CMS and Drees & Sommer advised GEG with the transaction. The sellers were advised by Nachmann Attorneys.
