CZECH REPUBLIC
Heimstaden Bostad AB has completed a €1.3b Czech property deal through the acquisition of the RESIDOMO group of companies.
The Czech property deal consists of 4,515 assets with 42,584 residential units and 1,675 commercial units.
The Czech property deal portfolio is mainly located in the Moravia-Silesia region, the most densely populated region in the Czech Republic after the capital city of Prague.
The acquisition of the Czech property deal follows Heimstaden Bostad’s recent expansion of its European core markets and RESIDOMO represents a strong platform for future expansion in the region.
The agreed purchase price of the Czech property deal is around €1.3 billion and will be financed through a mix of debt and equity. Leverage will be kept at levels to support the current rating. The transaction is subject to customary anti-trust clearance and is expected to close in Q1 2020.
The Czech property deal acquisition includes a full-scale operational platform, including property and asset management as well as facility management teams of close to 500 employees in total. Large renovation and upgrade programs have been carried out over the past 10 years and Heimstaden Bostad will continue to develop and upgrade the portfolio and its operations in line with its Friendly Homes concept.
Czech market is ‘strong and stable’
Christian Fladeland, Chief Information Officer of Heimstaden, says, “The Czech residential market has proven strong and stable, and we look forward to develop both the portfolio and the organization as well as the relationship with our customers in the years to come. RESIDOMO fits well into our desire to own the full value chain and to build a world class operational platform to serve our customers and hence our owners.”
Patrik Hall, Chief Executive Officer of Heimstaden, says, “We are highly focused on owning the full value chain in the markets where we operate, and with the RESIDOMO team we obtain a well-performing operational platform right away. We are confident that the team will embrace our values and allow for efficient implementation of Heimstaden’s `best practice.”
Heimstaden Bostad was advised on the Czech property deal by Clifford Chance (legal), EY (financial and tax), Sentient (technical) and J.P. Morgan (financial) on the transaction. The seller was funds advised by Blackstone Tactical Opportunities and Round Hill Capital, a leading global real estate investment, development and asset management firm.
The image is from Wikimedia and is by Mark Ahsmann.
Greystar buys MB275 for young buyers and students
THE NETHERLANDS
Greystar Real Estate Partners has bought the MB275 building in The Hague, through one of its managed funds. MB275 is sold by UrbanTTP BV, a developer specialised in the development of rental apartment buildings and hotels in the Netherlands.
MB275 is an existing building developed by UrbanTTP containing 234 apartments, a GP practise, pharmacy and healthcare offices.
The apartments are currently being furnished by Greystar into modern rental apartments for students and young professionals at an attractive, all-inclusive, price point. This will create 234 stylish studio and two-bedroom apartments which will be furnished with high-quality fittings. The apartments will be available from Q1 2020.
The site will feature state-of-the-art amenities including a gym, roof terrace, courtyard, garden, bicycle storage, car park, onsite security and a service desk. Supporting health and sustainable living, MB275 will also feature bicycle renting and electric shared car schemes which will be accessible via smartphone apps.
MB275 is in the Leyenburg district, offering easy access to The Hague’s city centre, The Hague University, business district, beachfront and other important hubs for residents to work and socialise.
Attractively priced, high-quality housing solutions
MB275 fits with Greystar’s investment strategy and commitment to expanding its presence in the Netherlands, a market which is in need of attractively priced, high-quality housing solutions for young people following significant urban population growth in recent years.
Since Greystar opened its Dutch office in The Hague in 2015, it has established a portfolio of over 6,000 apartments for students, young professionals and families, of which 1,650 apartments are already operational, 2,500 are under construction and to be delivered over the next 18 months, and another 2,000 are under development. The portfolio spreads across Amsterdam, Utrecht, Rotterdam and The Hague.
Mark Kuijpers, Managing Director of Greystar Netherlands, says, “The demand for well-managed, build-to-rent developments continues to rise across Europe and the Netherlands, driven by urban population growth, the growing number of single or two-person households, and the lack of attractive supply for the next generation of urban dwellers. MB275 marks the latest step from Greystar to provide critically-needed housing in the region as part of its European strategy, having already developed 5 sites in The Netherlands over the past four years. We have already seen significant resident interest in MB275 and look forward to officially launching early next year.”
Source: https://www.greystar.com/about-greystar/newsroom/mb275
European logistics portfolio fetches €550m
GERMANY
Partners Group, the global private markets investment manager, has acquired a majority equity stake in a portfolio of 30 commercial properties in Germany, France and the Netherlands.
The properties are part of a portfolio previously owned by Imfarr Beteiligungs GmbH and SN Beteiligungen Holding AG. They were bought for a total transaction value of over €550 million. The acquisition is a joint venture with Peakside Capital Advisors AG.
The portfolio consists of 27 office and three logistics properties. The majority are in Germany, with the remaining assets in greater Paris and Amsterdam.
The German portfolio includes buildings in Munich, Hamburg, and Stuttgart, as well as the greater Düsseldorf and Frankfurt regions, and comprises a well-diversified tenant base. Following the acquisition, Partners Group and Peakside will work on a range of value creation opportunities, including repositioning several properties, to optimize the portfolio’s value.
Importance of the German market
Lars Kreutzmann, Co-Head Private Real Estate Europe, Partners Group, says, “This acquisition significantly expands our real estate portfolio in Germany and underlines the importance of the German market for us on a relative value basis. The portfolio benefits from attractive prime and secondary office locations and is a great fit with our value creation strategy, whereby we focus on properties that can benefit from repositioning with sufficient time and capital. We plan to undertake a multi-year value creation program to maximize value for our clients.”
In December 2019, Partners Group also agreed on behalf of its clients the sale of the City Campus office complex on Saatwinkler Damm in the Charlottenburg district of Berlin, for a transaction value of around €200 million. The property, which was repositioned during Partners Group’s holding period, includes 55,640 square metres of rental area and 479 parking spaces across six buildings. It was almost fully let to a mix of blue-chip tenants at the time of the sale.
Eight European hotels purchased for €620m
EUROPE
Covivio, through its subsidiary Covivio Hotels, has agreed to acquire a portfolio of eight hotels in European cities for around €620million.
Hotels in Rome, Florence, Venice, as well as in Nice, Prague and Budapest cost €573 million (capex included). In addition, the group bought a Hilton hotel in Dublin for €45.5 million. These new transactions mark the continuation of Covivio’s European expansion in major touristic destinations in Italy, the Czech Republic, Hungary and Ireland.
The first transaction covers the acquisition, from Värde Partners, a leading global alternative investment firm, of a portfolio of eight hotels, which are mostly rated five-star, and located in the city centres of large European metropolitan areas: Rome, Florence, Venice (x2), Budapest (x2), Prague and Nice. This portfolio of high-end establishments in prime locations includes several emblematic hotels such as the Palazzo Naiadi in Rome, the Carlo IV in Prague, the Plaza in Nice and the NY Palace in Budapest.
Italian hotels market
The transaction will be completed at the end of the first half of 2020. The Italian hotels market is ranked third in the world for the number of overnight stays (429 million recorded in 2018), Italy has a hotel real estate offering that is disparate and needs to be renovated, with a very weak rate of penetration of major brands (9.6% vs 48% in France). Due to its local platform and recognised expertise, Covivio aims to strengthen the attractiveness and profitability of the portfolio through a capex programme.
A portfolio with major potential for value creation
Totalling 1,115 rooms, these hotels will be operated under the brands NH Collection, NH Hotels and Anantara Hotels & Resorts. The latest is a very high-end brand well consolidated in the Asian markets and that the NH Hotel Group is introducing in Europe. For that, Covivio and NH Hotel Group (part of Minor International) signed long term triple net lease contracts with minimum guaranteed variable rent. The agreement has an initial duration of 15 years, extendable at NH Hotel Group’s option to 30 years. Covivio is now pursuing a capex program for the entire portfolio, that shows great potential for growth.
Initiated in 2014, the collaboration with NH Hotel Group began with the acquisition of a hotel in the centre of Amsterdam and then continued between 2016 and 2018 with the purchase of 10 hotels in Germany, the Netherlands and Spain. As a leading operator in Italy, NH Hotel Group has extensive expertise in the international high-end segment, which will be an additional advantage to assist the upmarket positioning of the portfolio.
Covivio’s investment totalled €573 M (capex included) for a yield target of 5.8% (including 4.7% minimum guaranteed yield).
First hotel acquisition in the Irish market
Covivio also acquired under a management contract of a Hilton four-star hotel in the centre of Dublin, for €45.5 million and a yield of 6.4%.
With 120 rooms, this hotel will benefit from a project to convert its meeting rooms into 10 additional rooms from now to 2021, generating a value creation of nearly 10%.
This acquisition allows Covivio to establish itself in a new European market.
Hotels centred on the large metropolitan areas
With these acquisitions, Covivio bolsters its status as European leader in the hotels investment market, with a hotels portfolio of €6.9 billion held within a total portfolio of €24 billion (representing respectively €2.7bn and €16bn in Group Share).
Covivio is also strengthening its strategy for upmarket positioning and geographic and operator diversification, initiated five years ago. Over this period, Covivio has doubled its portfolio of hotel assets, as well as the number of countries in which the group is present, while strengthening the partnerships in place. Covivio is currently partnered with nearly 20 hotel operators, representing about 30 brand names spread out over 12 European countries, with 76% of assets in middle and high-end establishments.
Dominique Ozanne, Deputy CEO of Covivio, says, “More than one year after we entered the British market, Covivio is continuing the European development of its hotel business by establishing itself in the city centres of the twenty most important tourism destinations in Europe. At the same time, we are both strengthening the quality of our assets, 85% of which are located in the large European cities, as well as our partnerships with leading hotel players in their segments.“
The image is from Wikimedia and is by ŠJů.
Nordic logistics assets acquired for €64m
sweden
M&G Real Estate, a leading solutions provider for global real estate investors, has acquired two prime logistics assets for a combined €64 million investment into the Nordics logistics sector. They were made on behalf of the M&G European Property Fund managed by David Jackson and Simon Ellis.
The assets are based in the established logistics and warehousing submarkets of Segeltorp and Brunna, both on the highways connecting to Stockholm city centre.
Myrfast, is a 15,060 square meter building, acquired off market for €46 million. The building is fully let to a single tenant, Postnord and is located close to the entrance and exit to the new Stockholm ring road, due for completion in 2026.
Lyckobrunnen is a new development, to the northwest of Stockholm close to the E18, E4 highways and Arlanda Airport. The building, which completed in 2019, has been constructed to BREEAM Excellent sustainability standards and is multi-let to Swedish trade, real estate and investment company Orvelin Group, luxury architectural and interior design materials group Cosentino and Engelmanns AB, a Swedish cheese wholesaler.
Rare assets
David Jackson says, “It is rare to find these kind of assets so close to the inner city of Stockholm and especially with an investment grade tenant such as PostNord with a long lease. Both assets are positioned in very strategic locations to service the increasing demand for last mile supply chain capability as a result of growth in e-commerce and consumer expectations for ever faster delivery times in Sweden.
“We still see logistics portfolios trading at a premium therefore our strategy is to continue buying these assets one by one to achieve higher returns for our investors. We are keen to identify further opportunities in this segment across the Nordic region in all relevant strategic logistics locations.
Marc Reijnen, Heads of Investment and Asset Management at M&G Real Estate, adds, “The logistics sector continues to undergo structural improvement as a result of the well documented positive fundamentals affecting the sector, and we have continued to increase our allocation to the sector across Europe. In Sweden, take up for logistics space continues to outstrip supply, with strong domestic demand for e-commerce but also an international export market in high tech and manufacturing industries. These strong fundamentals should support positive rental growth over the medium term.”
Source: https://global.mandg.com/news-and-media/press-releases/mandg-investments/2020/09-01-2020
For more European commercial property sales, see Consorto’s weekly deal round-up.
