German asset manager Warburg-HIH is to invest €300 mln in office space in Germany by the end of 2019.
The company is to set up a new business unit to identify suitable office properties in Germany’s 'big seven' cities; Berlin, Hamburg, Düsseldorf, Cologne, Munich, Frankfurt and Stuttgart. Purchases which offer value-add opportunities and rental upside potential are top of the shopping list.
Leading the new unit is Daniel Werner - a property development specialist - who joins from Hochtief Projektentwicklung, where he was head of Hamburg for the firm.
Hans-Joachim Lehmann, managing director of Warburg-HIH Invest, said: ‘In a dedicated effort, we will upgrade the properties, eliminate vacancies, bring them up to the market level within three to five years and dispose of them afterwards. We will limit these activities to the big seven cities, which are subject to keen demand among investors and tenant leads.’
Warburg-HIH is keen to diversify its product portfolio, which until now has been guided by a focus upon core and core-plus properties.
Explaining the new approach, Alexander Eggert, managing director at Warburg-HIH Invest, said: ‘Insurance companies, pension funds and superannuation schemes increasingly demand investment opportunities that will help them offset the current yield compression in the prime property segment.’
Earlier this month, the company announced its biggest sale to date, disposing of five office buildings in prime locations in Berlin, Frankfurt and Hamburg, for a reported €570 mln to Amundi Real Assets.
