UniTED KINGDOM
Cording Real Estate Group has secured the fifth investment for its £400 million Cording UK Residential Investment Fund in the UK rental sector.
It has agreed to forward fund a development in the rental sector of up to 160 apartments by Aimrok Development on the site of Wellington House in the centre of Leicester.
Cording Real Estate Group is a member of the Edmond de Rothschild Real Estate investment management platform. Cording UK Residential Investment Fund invests in the private rental sector on behalf of Continental European investors.
Planning consent has already been obtained for the conversion of Wellington House, a 52,673 square foot building that was built in the 1970s on the site of an old newspaper printing works and hosiery in Wellington Street.
A planning application has been submitted for an additional 64 new-build units to be constructed on the roof and in the courtyard increasing the overall size of the rental sector development to 160 units.
If the larger, 160-unit Wellington House development is implemented, the total forward funding package will be £24.5 million. Construction, which will be carried out by Stepnell, will commence this month and is expected to be completed in the first quarter of 2022.
The acquisition of the Wellington House site follows closely from the fund’s fourth investment last month, when it agreed to forward fund a build-to-rent development by High Street Residential on part of the site of the former Kent Street Baths in the centre of Birmingham for £49.7 million. The rental sector development will provide retail space, a café, gym and a residents’ hub along with a minimum of 262 mainly one and two-bed apartments for rent, which may increase to 279 units, subject to planning consent for the additional 17.
Second purchase in Leicester
Wellington House will be the fund’s second in Leicester alongside Merlin Wharf which reflects Cording’s confidence in the city’s residential property market and rental sector.
Cording will provide a lettings and management service for the completed development from its in-house PRS team.
Charlie Miller, director of residential acquisitions at Cording, says, “Cording’s proprietary research forecasts a sustainable high demand for affordable, professionally-managed accommodation in Leicester. Wellington House will provide low rise, Greenwich Village-style living that will appeal to tenants who want to live in the centre of Leicester.”
The Cording UK Residential Investment Fund was launched in August 2018 with equity commitments of more than £100 million from German institutional investors. Cording is in the process of raising an additional £150 million of equity commitments from Continental European institutional investors. Using leverage, the fund will have £400 million to create a diversified portfolio of PRS assets, delivering sustainable and stable distributions over a long-term holding period.
Cording focuses on the lower-to-mid market and has identified regional cities and locations outside Central London where demand for rental sector accommodation is strong and set to grow, and where existing stock is predominantly old and in houses of multiple occupation (HMOs).
The fund’s first four acquisitions were also forward funding agreements – the Merlin Wharf site in the Waterside regeneration area in Leicester, a site in the Stadium Quarter regeneration area in Warrington, a site in the Lace Market area of Nottingham and part of the site of the former Kent Street Baths in the centre of Birmingham.
The AIFM of the Fund in Luxembourg is Pancura SA, while Aztec Group acts as central administrator.
Source: https://www.cordinggroup.com/en/news/article/id/138
Shopping center fetches €290m
SPAIN
The ECE European Prime Shopping Centre Fund II has purchased the intu Asturias shopping center in Oviedo.
Its first property in Spain was bought for €290m.The ECE Fund II is now fully invested.
The seller is a joint venture company through affiliates of intu properties plc and Canada Pension Plan Investment Board.
ECE will be responsible for the asset management as well as center management and leasing. It will continue to work with the current operator of the property, Cushman & Wakefield.
Opened in 2001, intu Asturias features around 140 shops across a leasable area of approximately 74,000 square meters and around 5,000 parking spaces.
The center is in the Asturias region, an economically strong region in the northern part of Spain.
Anchor tenants include Primark, Media Markt, H&M, an Eroski hypermarket, and the Inditex brands Zara and Bershka. Plans for further development include a restructuring and modernization of parts of the center and the addition of further attractive anchor tenants.
Dr. Volker Kraft, Managing Director of the ECE Real Estate Partners fund management company, says, “We are delighted to enter into an attractive market which we have had in our investment focus for some years now.
“With the acquisition of intu Asturias, we have complemented our ECE Fund II portfolio by adding one of the strongest shopping centers in Spain with more than nine million visitors per year. Although it is currently virtually fully let, we have identified a number of exciting value-add opportunities, which we want to realize in accordance with our investment strategy.”
HIP buys first hotel in Portugal
PORTUGAL
HIP, a pan-European hospitality company owned by funds managed by Blackstone Real Estate Partners Europe, has agreed to acquire its first Portuguese hotel from Oxy Capital.
The five-star Lake Spa Resort is a 192-room hotel with direct beach access in the bay of Vilamoura in the Algarve.
Blackstone and HIP will renovate and reposition the luxury hotel over the next several years.
HIP is the largest owner of hotels in Southern Europe. The acquisition follows Blackstone signing binding documentation to acquire five high-quality beach resorts in Greece last September.
Alejandro Hernández-Puértolas, CEO and founding partner of HIP, says, “Portugal’s captivating cities and golden beaches make it one of the best holiday destinations in Europe, and we are delighted with our first acquisition in the Algarve. It is the perfect destination given its privileged location and a long tourist season. Through investing and active management, we will work to add value and further cement its position as a leading luxury hotel.”
James Seppala, Head of European Real Estate at Blackstone, says, “One of the many attractions of Portugal is its year-round sunshine and endless stretches of sandy beaches. Adding the Lake Spa Resort to the HIP portfolio is testament to our confidence in Portugal and specifically the Algarve as a premier tourist destination.”
The deal is subject to approval by the Portuguese Competition Authorities.
About HIP
HIP was acquired by Blackstone real estate funds in 2017. Through follow-on acquisitions, the HIP portfolio has grown to 63 5-star and 4-star hotels comprising approximately 19,000 keys located in the main tourist destinations in Spain and Greece.
HIP specialises in sourcing, executing, renovating and repositioning under-capitalized hotels. The team works in partnership with various hotel operators to enhance the hotels management as well as experience for the hotels guests. It is in the process of investing more than €700 million of capital into its existing portfolio of resorts.
Office blocks bought for Sustainable Properties fund
LUXEMBOURG
Munich-based investment manager, Catella Real Estate AG (CREAG) has acquired two office blocks at 7 Rue Thomas Edison, Strassen, Luxembourg for a sustainable properties fund
The Sarasin Sustainable Properties – European Cities fund is a product of Catella Real Estate AG in cooperation with the Bank J. Safra Sarasin.
The property has been acquired for its fund Sarasin Sustainable Properties – European Cities (SSP). It consists of two adjacent office blocks comprising 7,865 square meters, which are fully let to two Luxembourg governmental institutions and Banque Internationale à Luxembourg. The buildings were constructed in 2000. The premises of the governmental tenants had been fully renovated prior to lease start in 2018.
The building complex is located in Strassen, along the western gateway into the city, which is just 4km away.
Positive development
Strassen has experienced positive development in recent years. Further increase in demand is expected due to the projected tram extension along Route d’Arlon, which was presented by the Minister of Sustainable Development and Infrastructure in June 2018. The property is 500m away from the A6 motorway access.
Axel Bertram, Portfolio Manager of SSP – European Cities at Catella Real Estate AG, says, “This investment complements our existing presence in the BeNeLux region and is an important strategic expansion of our allocation.”
The fund, which
invests at least 75% of its capital in commercial property, aims specifically
to meet the needs of institutional investors in Switzerland, Austria and
Germany. Each building has to meet the sustainability standards of the Bank J.
Safra Sarasin.
Catella Real Estate AG was advised by Stibbe, EY and Pro Group. Inowai acted on
behalf of the seller. The acquisition was managed by Catella Investment
Management Benelux, an affiliate based in Maastricht, which will take over the
asset management of the property.
CREAG is headquartered in Munich / Germany, is part of the Catella Group. Catella Real Estate AG is a pan-European operating a fund manager providing several highly specialised investment products with a European focus that are not affiliated with a special bank. It focuses on real estate in international markets. As of June 2019, CREAG managed €2.3 billion of assets under management in 16 real estate funds.
Mixed-use building acquired in Amsterdam
NETHERLANDS
Perial Asset Management has acquired the Adam Smith Building, at Thomas R. Malthusstraat 1-3 in Amsterdam. It was purchased on behalf of its PFO2 investment fund.
The building at Rieker Business Park consists of 21,000 square meters office space, spread over a high-rise of 13 floors and a low-rise of seven floors. There are 250 parking spaces.
The property was built in 2002 and in 2019, it has been fully refurbished including the ground floor, which now offers a new restaurant and coffee bar and play areas. The property’s energy performance certificate has been improved to level A and the building now features all modern office specifications.
The Adam Smith Building is the headquarters of Knab Bank. Other main tenants include TKB and Tribes. The office is between South Axis and Schiphol Airport. Discussions are ongoing about a new metro line between Schiphol and South Axis including a station at Rieker Business Park, which should further improve accessibility of the area.
Low vacancy rate
Erik Langens, Executive Director Capital Markets, says, “This transaction reflects the high interest in Amsterdam office properties. Due to the current limited availability of well-located, high-quality office buildings, combined with a modest volume of new constructions, the vacancy rate of Amsterdam is expected to remain low.”
Yann
Guivarc’h, Managing Director of PERIAL Asset Management says, “In a very
dynamic, but selective rental market, the Adam Smith Building constitutes an
exceptional rental opportunity through its strategic location close to the city
center, its good accessibility, its large floor plates and its high-quality
amenities.
“This acquisition underlines PERIAL Asset Management’s interest in the Dutch
market and its intent to reinforce its presence in the Netherland’s main
cities.
The seller was advised by CBRE, Loyens & Loeff and Arcadis in this transaction. Perial was advised by L’Etoile Properties, NautaDutilh (Coco van Zuiden) and SGS Search.
Sources: https://www.etoile-properties.com/en/2020/01/14/letoile-properties-advises-perial-on-acquisition-of-adam-smith-building-amsterdam/ and https://news.cbre.nl/perial-acquires-adam-smith-building/
See Consorto’s selection of European commercial property.
