Principal Real Estate Europe, the European real estate investment arm of Principal Global Investors, has launched its first, dedicated, long income-focused, European real estate fund.
With a target investment of €800 million-plus over the first five years, the fund’s aims to provide a return that will track Eurozone CPI plus appropriate real estate risk premia through investment in long leased Eurozone real estate assets.
The first acquisition by the real estate fund is a temperature-controlled warehouse in North Amsterdam with a WALT of 20.5 years. The main tenant of the building is the Eye Film Museum.
The fund investment strategy has been co-designed with Willis Towers Watson (“WTW”) to create a product that is especially suited to meet the needs of European institutional pension fund investors while benefitting from the market knowledge and on-the-ground asset management and transactional experience of Principal. The real estate fund will access long-dated, inflation-linked income streams backed by investment grade credit at a time when real estate provides an attractive spread against other asset classes.
Robert Leadbetter, Fund Manager at Principal Real Estate Europe, says, “This is an exciting time to be entering the European long lease real estate fund market. There remain relatively few competing products dedicated to the acquisition and management of long dated real estate assets in Europe, although this type of investment vehicle is increasingly in demand from investors both as a hedge against inflation and as a higher yielding alternative to bonds of equivalent credit strength.
“Our first acquisition demonstrates not only that there are high-quality, long-term income opportunities in Europe, but that with this new Fund Principal is well placed to source and execute such transactions.”
Midstar acquires Copenhagen Admiral Hotel
Asset management company Midstar Hotels has acquired Copenhagen Admiral Hotel from CAH Holding A/S.
The transaction includes both the real estate and the operating company which is managed by Basalco A/S.
The hotel, which includes 366 hotel rooms, a bar, the SALT restaurant and meeting facilities, is in a converted warehouse dating from the 18th century. It is close to the Royal Palace, the Royal Playhouse and Nyhavn, and the city centre.
The iconic and historical property was originally built in 1787 and was later converted into a hotel in 1978. The hotel is currently undergoing a total rooms renovation which will be completed in 2020.
Marc Henriksen, Partner at Midstar, says, “We are pleased with the acquisition of this exceptional hotel and look forward to further develop its positioning as one of the best hotels in Copenhagen. With this addition, Midstar has a well-diversified Danish hotel portfolio covering various segments, locations and stages of the product lifecycle.”
Assisting Midstar in the transaction was Plesner Advokatpartnerselskab, KPMG, Aurora, Miwell and HOPS. Kromann Reumert and Colliers assisted the vendor.
The image is taken by Tim Bartel and is on flcikr. It is reproduced under Creative Commons.
CPI buys Warsaw offices, with more acquisitions to come
CPI Property Group, the largest owner of income-generating real estate in the Czech Republic, Berlin and the CEE region, has bought the Equator IV office building.
It is located in Jerozolimskie Aleje (Jerusalem Avenue), central Warsaw. Equator IV offers more than 20,800 square metres of gross lettable area and 226 parking spaces.
The property benefits from about 90% occupancy with further upside potential and is located close to transport hubs. Equator IV was completed by the seller Karimpol Group in June 2018.”
Tomas Salajka, Head of Acquisitions and Asset Management for CPI Property Group (CPIPG) says, “CPIPG is pleased to complete the purchase of Equator IV, which is a high-quality addition to our existing Warsaw office portfolio.
“Our acquisition pipeline in Poland is robust and we expect to announce more transactions in the coming weeks and months.”
On 8 October 2019, CPIPG announced the Company’s intention to acquire more than €800 million of high-quality offices in Warsaw during Q4 2019 and early Q1 2020.
Green Corner A and Equator IV were cited as near-term opportunities; Equator IV has now closed, while Green Corner A has proceeded to a signed preliminary purchase agreement and is expected to close in late 2019 or early 2020.
Harald Jeschek, Managing Partner of Karimpol Group, says, “Today marks another important moment in the history of Karimpol Group in Poland. The sale of Equator IV to CPI Property Group proves that the commitment to quality pays off and helps to attract high profile long-term investors.
“We are confident that this building with its excellent tenant roster will gain in value and will be a perfect addition to the impressive CPI Property Group portfolio in Poland.”
Berlin’s Atrium Charlottenburg bought for more than €160m
Hines, the international real estate firm, has acquired the Atrium Charlottenburg office building in Berlin, for more than €160 million. It has been bought on behalf of the Hines European Value Fund (HEVF).
The building consists of up to nine floors of offices and offers a Net Rentable Area (NRA) of 40,000 square meters.
Located on Berlin’s Kaiserin-Augusta-Allee, the building is 100% leased to tenants including Land Berlin, Jobcenter Berlin Charlottenburg-Wilmersdorf and Fraunhofer FOKUS.
The building benefits from an inner-city location within Berlin’s S-Train circuit as well as flexible floor plans. Located close to the “Mierendorffplatz” subway station, it is near Berlin’s City West area, the Zoologischer Garten, Berlin’s main station Hauptbahnhof and highway A100.
Atrium Charlottenburg has served as the headquarters of Fraunhofer-Institut für Offene Kommunikationssysteme FOKUS since 2003 and today the research institute occupies around 15,000 square meters, including a meeting and conference area.
Fraunhofer FOKUS specializes in applied research and development in information and communication technology. Regional government tenants Land Berlin and Jobcenter Berlin Charlottenburg-Wilmersdorf are also tenants.
Over the coming years Hines plans to identify and evaluate potential upgrades, improvements and modernizations to the building, likely including construction as well as (re-)letting activities that are anticipated to generate significant rental uplift within the building.
First Berlin investment
The acquisition of Atrium Charlottenburg is HEVF’s first investment into the Berlin office market and the seventh investment by the Fund since December 2017. Over 65% of the Fund’s €721 million investor equity commitments are now allocated to a diversified portfolio including office, retail, hotel, residential and logistics in Germany, Denmark, Spain and the UK.
Dr. Kai-Magnus Schulte, director of Hines, says, “We are happy to have secured this exciting investment opportunity for our Hines European Value Fund. The building offers a rare combination of a good inner-city location, high flexibility, a very strong tenant line-up and substantial potential to create value through physical improvements and leasing activities. Our local team has significant expertise in development, asset management and value creation and we are eager to create new value in the Atrium Charlottenburg.”
Paul White, HEVF Fund Manager, says, “The acquisition of the Atrium Charlottenburg demonstrates HEVF’s strong belief in the Berlin market and strong rental growth. The city attracts a highly diversified occupier base for office space, including research and technology. The fundamentals in Berlin are exceptionally strong with a positive trajectory for rents. The asset offers an attractive balance of secure income alongside the opportunity for value creation.”
Landesbank Hessen-Thüringen Girozentrale (HELABA) served as the financing bank in this transaction. Hines was legally supported by Pöllath + Partners, technically supported by Arcadis, and tax as well as structure advise was provided by BakerTilly. BNP Paribas Real Estate acted as transaction advisor on behalf of the vendor.
Amsterdam’s new Ammonite Hotel is fund’s fourth purchase
CHO Partners AG has bought its fourth hotel for ECHO Fund SCSp – the new four-star Ammonite Hotel in Amsterdam.
The acquisition allows investors to participate in the development of one of the most dynamic tourism markets in Europe at an acquisition yield which exceeds ECHO’s investment criteria.
The Ammonite Hotel is a new hotel with 227 rooms in a building designed by the famous architect Roberto Meyer. It is the first hotel full of distinct minerals and authentic fossils of museum quality. Each floor of the hotel has its own theme which is also reflected in the various floor designs.
Amsterdam is one of the most visited cities in Europe with around 17 million overnights per year driven by both tourists and business travelers. As an important gateway city in Europe, it is one of the best performing hotel markets in terms of occupancy rates and average room prices.
The Ammonite hotel is well located at the southern border of Amsterdam, with easy access to the city centre and Schiphol airport.
It was acquired with the opportunity for ECHO to enter into a new, institutional operator contract with a renowned international hotel operator around closing.
Michael Regner, Founding Partner of ECHO says, “By acquiring the Ammonite Hotel, ECHO has taken advantage of the unique opportunity to buy a hotel in Amsterdam while simultaneously locking in a long-term contract with an international operator. We are well progressed with the discussions on that new long-term contract and are confident to sign the agreement by end of this year.”
The image is from the Ammonite Hotel Facebook page.
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