Canadian investor Oxford Properties plans to build up a significant portfolio in Berlin following its €1.1 bn acquisition of Sony Center from Korea’s national pension service.
Although there is no fixed investment target for the German capital, Oxford’s executive vice president and senior managing director Europe Paul Brundage says the city could represent 5 to 10% of the company’s total real estate portfolio in the future.
‘We spent time studying Germany and the challenge is that it is polycentric, whilst we are a type of investors who is very focused on a city strategy in which we go long and deep in scale,’ commented Brundage. ‘In the end we have decided we like Berlin, it is the largest market in the country, it is global and diverse. We think that Berlin’s time is now. There is probably no other city in Western Europe which has had so much change as Berlin. We like the growth prospect, it has already been experiencing some good growth [in terms of rents], but there is still upside.’
Oxford, the property arm of pension fund OMERS, entered Germany’s commercial property market earlier this month with the acquisition of Sony Center, a 112,000 m2 mixed-use scheme in Potsdamer Platz, together with US-based Madison International Realty for a price of just over €1.1 bn.
The yield is said to be slightly over 3%, a sign of the positive development that the German city has undergone both in terms of rental growth and capital values.
Brundage: ‘This acquisition is a meaningful step toward achieving our stated strategy of reaching C$5 bn (€3.4 bn) of assets under management in Continental Europe by 2020, focusing on Berlin and Paris. This strategy is backed up by our long-standing commitment to the central London office, high street retail and build-to-rent residential sectors.’
The full article will be published on PropertyEU's November issue
