M7-Starwood JV spends €58m on German light industrial

MStar Europe, a joint venture between M7 Real Estate and Starwood Capital, has bought nine German light industrial warehouses from various vendors for a total amount of almost €58 mln.

The purchases add 147,000 m2 of lettable space to MStar Europe’s portfolio of assets, which has expanded significantly in the past two months through acquisitions in the Netherlands and the buyout of the listed Tamar European Industrial Fund.

M7 Real Estate advised on the purchases and will manage the assets.

The investments in Germany comprise the completion of a €44.7 mln purchase of a five-strong property portfolio from funds managed by Valad Europe. The properties, located in the vicinities of Frankfurt, Cologne, Hamburg and Dusseldorf, have a total lettable area of around 100,000 m2, and are occupied by 55 tenants. The purchase price equates to less than €450 per m2.

The other three assets located in Dortmund, Herne and Kassel were bought from a US fund manager for just over €7 mln while in Dormagen the joint venture acquired a 14,200 m2 property from a fund advised by Archon Group for €5.8 mln. The property is 75% occupied and currently has 10 tenants, the largest of which is Arlogis.

'The lack of development during the financial crisis means there is great potential for these well-located assets through hands-on management...We are actively looking for more of these high-yielding investments in Germany,' commented Alyssa Huse, managing partner of M7 Real Estate Germany.

Adam Shah, Senior Vice President at Starwood Capital Group, added: 'We view light industrial as a defensive asset class that benefits from both sector and credit risk diversification.'

MStar Europe is M7 Real Estate and Starwood Capital Group’s second joint venture after MStar, a UK-focused vehicle the partners formed in June 2013. Established in April 2014, MStar Europe aims to invest up to €500 mln in high-yielding , multi-let light industrial property in Continental Europe.