M7 picks up 102,000m2 portfolio in the Netherlands

M7 carried out the acquisition of the 17-asset portfolio on behalf of its latest European investment fund, M7 European Real Estate Investment Partners III.

The vendor was a fund managed by CBRE Global Investors. The investment volume was not disclosed but information in the Dutch land registry suggests €27 mln was paid for some or all of the assets.

The 13 office and four industrial assets are located in the Netherlands’ across cities including Amsterdam, Utrecht, The Hague and Rotterdam, as well as Amersfoort. The portfolio generates €4.8 mln of rental income per annum from 102,000 m2 of gross leasable area and has a WAULT (weighted average unexpired lease term) of 9.16 years. Existing tenants include Beate Uhse, Van Heck, Dr Oetker and The Salvation Army.

'These assets provide a strong mix of core income coupled with opportunities to drive value through refurbishments and rental growth, and we look forward to working with this portfolio to develop high-quality assets that produce meaningful income and total returns for our investors,' said M7 CEO Richard Croft.

The latest acquisition brings M7 EREIP III’s total portfolio to 284,000 m2 across 29 office, four retail and four industrial assets. The fund targets assets which offer both sustainable income streams and asset management opportunities in the retail, office and the multi-let industrial sectors in both Germany and the Netherlands. It had received investor commitments totaling over €80 mln at its first close in December 2015.

Dutch market
M7 has been very active in the Dutch market in recent months. In March the company acquired another 15 assets across the Netherlands in three separate transactions. These transactions involve the acquisition of the Frontier building in Delft, a fully let 10,000 m2 office building in the Delftechpark, purchased from Synchroon, as well as the Ten portfolio from Stichting Achmea Dutch Office Fund and the North portfolio from Retail Fund North.

The Ten portfolio consists of 10 office and business space assets located throughout the Netherlands, including Almere, Amersfoort, Arnhem, Breda and Maastricht, across a total of 48,480 m2. The portfolio is currently 67.6% let to 28 tenants, with major occupiers including Oranjewoud, Peek Traffic, Perfect Call, VGZ and DAS.

The North portfolio consists of four retail parks in Assen, Drachten, Emmen and Emmeloord, across a total of 100,000 m2 retail/warehouse space. The portfolio is 80% let to 55 tenants.

In November 2015 M7 EREIP II purchased a portfolio of 42 assets in three individual acquisitions in the Netherlands, including the Spring Portfolio that originated from a non-performing loan. The purchases comprise a total of 135,688 m2 of space and were made from three different vendors.

The combined purchase price was over €82 mln, representing an initial yield of approximately 11%. The assets, with a combined vacancy rate of 25%, are located throughout the Netherlands and comprise a mixture of multi-let office, local retail and light industrial property.

While M7 is active in a number of European markets, the strong focus on the Netherlands is very similar to the strategy of Halverton, a European real estate investment manager founded by Croft in 2004. Halverton and its team was taken over by Sydney-listed property company GPT four years later and rebranded as GPT Halverton. Croft and a number of senior executives left a year before GPT sold the business to Internos in 2008. M7 was founded a year later.

A profile of M7 Real Estate appears in the April edition of PropertyEU Magazine.