Union Investment buys Mitte Town Hall in Berlin for €87m

German fund manager Union Investment Real Estate has acquired Mitte Town Hall in Berlin from Curzon Capital Partners III, a core-plus fund advised by Tristan Capital Partners, for €87.4 mln.

berlin mitte town hall

Berlin Mitte Town Hall

Let to the federal state of Berlin and located at 31 Karl-Marx-Allee, the property comprises 20,000 m2 of space over 13 storeys, including a cafeteria open to the public and a large conference hall.

'For a conservative, long-term investment manager such as Union Investment, Mitte Town Hall represents an exceptionally good investment opportunity,' said Alejandro Obermeyer, head of investment management in German-speaking countries (DACH) at Union Investment Real Estate.

'The Berlin Mitte district continues to perform very well overall. The vacancy rate in the office segment is at a historic low of 2%, and the federal state of Berlin is an extremely reliable occupier. For all these reasons, Mitte Town Hall is an excellent fit with our existing holdings.'

In the immediate vicinity, Union Investment also recently acquired two hotels: Holiday Inn Express Berlin Alexanderplatz and Hampton by Hilton Berlin Alexanderplatz. The adjacent Alexa shopping centre has been held in Union Investment’s real estate funds since 2010.

The Hamburg-based real estate investment manager owns a total of 17 commercial properties in the German capital worth €2 bn.

'Together with our long-term partner caleus capital investors, we have completed the successful repositioning and sale of the asset, achieving our objective of prolonging the lease with the Municipality of Berlin and thereby converting this well located asset to a secure and long term let core investment product with upside potential at lease expiry,' commented Jean-Philippe Blangy, managing director, head of asset management at Tristan Capital Partners.

'This transaction is an example of how we work hard to identify investment opportunities with a single impairment for our core plus fund series and seek a disposal once the asset management plan has been successfully implemented to achieve exceptional returns for our Fund and its investors,' Blangy concluded.

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