German fund manager Union Investment and international privately-held developer-investor Hines have joined forces to acquire the MediaWorks office project in Munich's Werksviertel district in an off-market transaction for an undisclosed amount.
Union Investment holds the vast majority of the shares, while Hines acts as equity partner and operational developer on site. Union Investment is contributing the shares to its two open-ended retail real estate funds UniImmo: Deutschland and UniImmo: Europa. Although the price paid was not disclosed, press reports put the deal value at €650 mln.
Real estate funds managed by Blackstone acted as sellers of the 96,000-m2 site. The project also includes an existing parking garage on the property with 825 parking spaces. The anchor tenant with a long-term lease is RF360 Europe GmbH, a subsidiary of the US semiconductor manufacturer Qualcomm.
MediaWorks Munich is located between Munich's eastern railway station and Karl-Preis-Platz and forms the southern entrance to the Werksviertel. Since the 1990s, the former manufacturing site has been upgraded to a lively location and is now home to over 100 companies. The infrastructure is enriched by gastronomy, shops, sports, a conference center, doctors, child care and the newly planned concert hall.
Union Investment and Hines are jointly planning a comprehensive refurbishment of the portfolio to develop the property into a modern campus focused on flexibility and efficiency. The planned total investment in the project, including project development, will exceed €1 bn.
‘Following the acquisition of the Neue Balan 27 project in the immediate vicinity, which is already well let, we are delighted to further expand our commitment in Munich at this location on the largest and most prominent site in the up-and-coming Werksviertel district. The investment is impressive first and foremost because of its enormous development potential, which we intend to drive forward in the short term by refurbishing the vacant space,’ said Alejandro Obermeyer, head of investment management DACH at Union Investment.
He added: ‘As an investor with a strong equity base, joint ventures with experienced project developers such as Hines offer us very good opportunities to enter large-volume projects at an early stage with shared entrepreneurial risk. We consider this to offer strong development prospects for our future growth in Germany, but also abroad.’
