UNITED STATES - AIFAA, an investment company backed by 12 Swiss pension funds, has doubled the size of its real estate portfolio in the United States by acquiring two properties in all-cash deals for $72m (€45.9m).
Christopher Duisberg, managing director for the company's US operations in New York, said: "There are two factors in play for us. One is that we do believe in the US market on a long term basis. Another factor is that the real estate market in Switzerland is not large enough for us to invest all of our capital in our home country."
Both properties are expected to see debt applied some time in the future, but one of the new acquisitions was the $51m purchase of the1.2 million s.f. (92,900sm2) distribution facility in Groveport, Ohio.
AIFAA purchased the property in part because it is close to Columbus Airport, giving the fund the chance to capitalise on the rapid growth in logistics operations within this region.
The asset was developed last year and is already fully leased to two companies with global operations.
At the same time, AIFAA has also bought the 50,000 s.f. Elston Logan Plaza retail property in Chicago for $21m - a property which went through core reconstruction in 2007.
AIFAA believes the project is located is a strong area as there is said to be demand for "new kind of retail" in the region, as it is situated in an up-and-coming residential neighborhood and would therefore see local interest in its X Sports Fitness facility, as well as the Panera Bread and Target stores.
Cap rate on both purchases is anticipated to be 7%, based on a projection of the net operating income for the next 12 months.
The company now has a US portfolio valued at $118m, and the two other properties in its portfolio are office buildings in Philadelphia, but is now looking mainly at office, retail and industrial transactions on the East Coast and in the Midwest.