Alternative investment management firm Harrison Street has sold five purpose-built student accommodation properties (PBSA) in Dublin, Ireland, for €400 million.
The buyer of the student accommodation is Global Student Accommodation Group (GSA).
The student accommodation was the first investments under Harrison Street’s and GSA’s Ireland joint venture. This initially committed to invest €250 million to address the growing regional demand for high-quality student housing. GSA will continue to manage the properties after the transaction closes on behalf of its investors.
The properties comprise 1,971-beds and include Ardcairn House, Kavanagh Court (two phases), New Mill, The Tannery, and Broadstone Hall. They will primarily serve students at Trinity College Dublin, Royal College of Surgeons in Ireland, TU Dublin Grangegorman, and University College Dublin.
The student accommodation portfolio has an average 97% occupancy rate. All properties have been delivered to date, apart from Kavanagh Court Phase II, which is expected to be completed in the first half of 2020.
Investment in quality student accommodation to continue
Rob Mathias, Senior Managing Director and Head of International Business for Harrison Street, says: “This portfolio transaction is representative of Harrison Street’s ability to execute on our strategy of developing high-quality PBSA properties with best-in-class partners in top-tier European university markets backed by favourable demographics. GSA has a deep familiarity with these properties, and we are pleased to build on our strong partnership with them as we continue to identify attractive investment opportunities on behalf of our limited partners.”
Nicholas Porter, Chairman at GSA Group, says, “This transaction underpins GSA’s global growth strategy and our plans for expansion in the region, helping to generate increased opportunity and value for our investors and partners.”
He adds, “Dublin is one of the world’s most
prestigious destinations for academic excellence with increasing demand for
outstanding student accommodation, and the transaction positions GSA to benefit
from positive economic and demographic trends in the city. Our expertise as a
world-class accommodation provider positions us ideally for further expansion
in Ireland, as we continue to provide the market-leading student experience.”
The portfolio is part of Harrison Street’s HSRE European Property Fund I that raised €235 million of capital commitments in 2015 and has experienced strong growth. Coupled with the previous realisation of ECLA Paris and projected cash flow distributions between now and closing, Fund I will have returned 106% of called capital to investors. The Ireland portfolio sale demonstrates Harrison Street’s strategy of maximising value for its investors by creating portfolios through single asset acquisitions and development that can be sold as part of a larger portfolio upon stabilisation.
Fund buys new Barcelona hotel for €40.5m
Principal Hotel Real Estate Fund II has acquired the Ona Hotel Terra in Barcelona for €40.50 million from a local real estate developer.
The three-star hotel has 152 rooms, a restaurant, a bar, two meeting rooms as well as a rooftop terrace with swimming pool offering exceptional views over Plaza de España and Palace of Montjuic.
As part of the transaction, a long-term lease was entered into with Ona Hotels, a family-owned Spanish hotel group based in Barcelona which operates 40 hotels in four countries (Spain, Andorra, Morocco and Tunisia) with around 5,500 rooms.
This acquisition reflects the value-add strategy of Hotelfund II to focus on strategically located, high quality 3-5 star hotels in major cities across Europe with significant potential to increase value.
Ona Hotel Terra in Barcelona was secured in a forward purchase contract whilst still under construction as it is one of the last hotels to receive a building permit before the hotel development moratorium in Barcelona.
It is ideally located in the centre of Barcelona next to the convention centre “La Fira” in a pedestrianised street just behind Plaza de España. Principal acquired the hotel once construction was completed and the brand new hotel opened on 17 January 2020.
Principal expects good performance and value enhancement of the hotel as it benefits from the strong general hotel market development in Barcelona, the normal ramp-up in trading of a newly opened hotel and dynamic lease structure.
This is the second hotel Principal has acquired on behalf of Hotelfund II and follows the signing of significant additional equity of over €100 million bringing the total subscribed equity of Hotelfund II to €245 million.
Jochen Schaefer-Suren, CEO of Principal’s Hotel and Leisure division, says, “The Ona Hotel Terra in Barcelona is an exciting investment for our Hotelfund II as it is a very attractive value-add opportunity in particular as the hotel development moratorium in Barcelona should constrain supply and provide a unique opportunity to benefit from future demand growth to all existing hotels including our new hotel in Barcelona. It is a perfect illustration of the type of value add hotel investments Principal is looking for after the successful sale of the hotel portfolio in Hotelfund I, led all but of one of our investors in Principal hotel fund II to give us this further vote of confidence with over €100 million additional equity. This allows us to look for further hotel investment for Hotelfund II of over €400 Mio in 2020 and beyond.”
Principal Real Estate Europe is part of Principal Financial Group’s dedicated real estate business, Principal Real Estate Investors, which manages or sub-advises $85.7 billion in real estate assets globally, as of September 30, 2019.
Düsseldorf Media Tower acquired
Special fund CONREN Land has bought the Media Tower property at Düsseldorf Medienhafen from Cording Real Estate and BNP Paribas Real Estate Investment Management (REIM) Germany.
The 18-storey high-rise was originally purchased in 2016 for the Real Value Fund, which BNP Paribas REIM Germany co-manages together with the Cording Real Estate Group.
The Media Tower is a 64-meter high-rise encompassing about 9,000 square meters. Roughly 400 square meters are dedicated to restaurant use on the ground floor with 7,600 square meters of office space on the upper floors. The building also houses about 800 square meters of archive space. The building’s occupants have access to 115 parking spaces located at the neighbouring property. The asset features a flexible layout that can be adjusted to meet specific tenant requirements.
After purchasing the high-rise, the fund repositioned it on the market and was able to reduce the office vacancy rate by over 50% The contracting parties have agreed not to disclose the purchase price.
Claus Thomas, CEO of BNP Paribas REIM Germany, says, “Based on the IRR method we generated a yield of roughly 18% with this investment over the course of a four-year holding period. This is an excellent example of the potential to be found in the current market environment by taking an active management approach with a competent fund management team.
“That is why in the current low-interest environment institutional investors are showing considerable interest in value-add assets with potential to be repositioned as core investments. In light of this, we have also decided to increase our equity capital target for the fund to €250 million. We are currently negotiating the purchase of a new property to reinvest the capital made available by the recent sale. Further acquisitions are planned.”
The Real Value Fund is a German special real estate fund structured for institutional investors, which was launched by BNP Paribas REIM in 2015. The fund invests in commercial properties in Germany with value-add potential. Currently, the fund holds four properties and manages the capital commitments of five institutional investors including two insurance companies, two pension funds and one savings bank.
Dentons (legal), BNP Paribas Real Estate (broker) and Arkadis (technology) acted as advisors to the seller.
Retail park comes with strong tenant mix
Real estate private equity firm Niam has acquired a modern retail park in an established location in Malmö, Sweden.
The #Bernstorp retail park consists of four properties and around 48,500 square meters of lettable area. There are 16 tenants, the largest being Bauhaus, City Gross, Elgiganten, Leos Lekland and Jula. Two new restaurants, McDonald’s and KFC, are currently being constructed. The seller is Aberdeen Standard Investments.
Niam Chief Executive Officer, Fredrik Jonsson, says, “We are happy to announce that we have acquired a well-functioning retail park with a strong tenant mix. Aberdeen Standard Investments has, in collaboration with RED, succeeded in developing #Bernstorp into a long-term attractive retail location, well positioned in the Malmö market.”
NIam has real estate assets under management of approximately €3.6 billion. It offers global institutions the opportunity to invest in the Nordic property markets. Niam was established in 1998 and has invested over €10.6 billion since inception. It is headquartered in Stockholm and has offices in Oslo, Helsinki and Copenhagen.
Prime logistics site bought in northern France
AXA Investment Managers – Real Assets has acquired a prime logistics development site in Evin Malmaison, in the Nord Pas de Calais region in France.
It has the potential for up to 77,500 square meters of Grade A logistics space in a single XXL building. The site has been purchased on behalf of the Logistics Development Club and will be developed by Baytree Logistics Properties.
Located in France’s third-largest logistics market, the 208,000 square meter site benefits from excellent transport infrastructure and a good supply of local labour. The site is less than five minutes’ drive from the A1/A21 junction, which links directly to Lille, 30 km to the north and Paris, 200k km to the south. The port of Calais is accessible in just over an hour.
The building permit and environmental code regulatory authorisations have been obtained and Baytree intends to pursue a build-to-suit strategy to deliver modern and flexible warehouse space that is suitable for a wide variety of different logistics uses.
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