Hamburg Trust launches fund under new German legislation

German investment house Hamburg Trust has launched its first closed-end special property fund under the latest German legislation governing KAG capital investment funds.

The closed-end special alternative investment fund (AIF) called 'FORum Mainz' was established around the new headquarters in Mainz of the German trade association for the wood and metal industry.

The fund is structured in accordance with the German Investment Code, or Kapitalanlagegesetzbuch (KAGB) which came into force in July 2013.

In preparation for the fund, Hamburg Trust had acquired the building project from developer J. Molitor Real Estate for around €50 mln in October 2013. The FORum Mainz fund will have a volume of just over €52 mln, including almost €28 mln in equity from institutional investors who are to receive an average yearly distribution of about 7% and an internal rate of return of about 8.2%.

The office building, with a rental area of some 17,400 m2 and 500 parking spaces, is being constructed in the Kisselberg office location near Mainz's city centre. The trade and insurance association wood and metal is among Germany’s three biggest statutory accident insurers. It is to occupy the entire building on a 15-year lease and handover is scheduled for end-2014.