Savills IM buys in Germany, Luxembourg for German pension fund

Savills Investment Management has bought €75m of office and retail assets in Luxembourg and Germany for a southern German pension scheme.

The two assets were sold by a German fund and a UK investment manager.

They include a 6,400sqm office building in Luxembourg, in the district of Kirchberg, which is leased on long-term leases to tenants including Accenture, Cisco, TD Bank and TMF.

Gerhard Lehner, managing director and head of fund management at Savills Investment Management, said the vacancy rate in the Luxembourg office market is low compared with most European markets, offering potential for above-average rental growth.

The other asset is a 10,000sqm retail centre in Germany, in Bielefeld, let to tenants including Edeka supermarket and Media Markt electronics.

“Yields at purchase are still relatively low, particularly compared to core German markets,” Lehner said.

“With its long-term leasing situation, the retail centre in Bielefeld will help guarantee stable distribution for the portfolio, which we have been building for the pension fund since 2015.

Lehner added: “We are planning to again focus our acquisition activities on core/core-plus office and retail assets, as well as selected logistics assets.

“We will particularly be looking to Germany but will also be placing greater emphasis on southern European countries and the Netherlands.”