Europa Capital has completed, on behalf of Mitsubishi Estate London, an affiliate of its principal shareholder, Mitsubishi Estate, the acquisition of a 22,000 sqm multi-let office building in Unterfohring, Munich. The property, at Feringastrasse 10-12, was acquired from Ekistics Property Investors 1 LP, a value-add focused private equity real estate fund advised by Ekistics Property Advisors LLP.
This marks the launch of a new core-plus initiative on the part of Europa Capital in European offices, initially into the principal German cities and followed in due course by other core European office markets, as part of a continuing drive by Mitsubishi Estate to expand and diversify its overseas portfolio. The intention in the medium term is to attract other institutional investors by offering an exposure to Europe’s principal office markets, once critical mass is achieved. Europa Capital will asset manage the portfolio.
The property, constructed in 2003, is currently 88% let to a diverse tenant base at rents below market levels and offers reversionary potential. This reflects the tone of the wider Munich office market, which offers significant rental growth prospects due to the current significant supply/demand imbalance. Munich is one of the top European destinations for institutional investors at present, due to the strong macro-economic and real estate fundamentals of the city. Unterfohring is one of the established submarkets to the north of Munich, close to the city’s airport, which, consistent with the broader market, is currently suffering undersupply, and with a limited pipeline of new accommodation in the medium term.
Nic Fox, Partner at Europa leading its business in Germany, commented: “This off-market acquisition marks the beginning of a new product line in a lower risk area from our pan-European value-add funds. We strongly believe in the continuing performance of the German economy and property market and intend to assemble a diversified portfolio, attractive to institutional investors”.
Yuichiro Shioda, managing director and CEO of Mitsubishi Estate London, said: “The real estate fundamentals underpinning both this building and the wider Munich office market make this an excellent initial acquisition for the new partnership with Europa Capital. As we build this new portfolio, we will be targeting further acquisitions in similarly strong markets across continental Europe”.
Ekistics was advised by BNP Paribas Real Estate in relation to this divestment and had retained Elystan Capital Partners GmbH as its local operating partner over the life of this project. Savills advised Europa Capital on the acquisition.
For further information, please contact: Gordon Simpson/ Elizabeth King, Finsbury: +44 20 7251 3801
About Europa Capital:
Europa Capital is an established real estate fund management group operating across Europe adding value through risk-based acquisition strategies and active asset management on behalf of its investors.
Since 1995, Europa Capital has collectively raised 9 real estate funds and committed to over 105 transactions totalling more than €9.5 billion across 19 European countries.
The Europa Funds benefit from Europa Capital’s established network of partners across Europe who co-invest in acquisitions made by the Europa Funds. These country and joint venture partner relationships in some cases extend back more than 20 years.
Europa Capital is a member of Rockefeller Group International, Inc. (“RGI”), a wholly owned US subsidiary of Mitsubishi Estate. RGI is a strategic investor alongside Management. Europa Capital Partners LLP and Europa Capital LLP are authorised and regulated by the Financial Conduct Authority.
About Mitsubishi Estate:
Mitsubishi Estate is Japan’s leading real estate developer and one of the world’s largest comprehensive real estate companies. Its total assets are around £33bn (31st March 2016) and it currently operates in the US, China, Singapore and the UK. Since its first acquisition in London in 1985, Mitsubishi Estate London has been developing top-quality buildings including Paternoster Square, Bow Bells House, Central St Giles and 8 Finsbury Circus. Its portfolio exceeds one million sq ft; in 2014 it expanded its operation into continental Europe with the acquisition of a Paris office building.
Ekistics Property Advisors LLP is a real estate investment advisor and, inter alia, the sole advisor to Ekistics Property Investors 1 (“Ekistics” ,or, “EREP I”), a pan-European, value-add real estate private equity fund. Since its inception in 2010, EREP I has made value add investments in a wide range of property types across the UK, Germany and Spain, deploying circa USD 181million of equity to acquire or finance assets with a gross asset value of circa USD 365million. The team at Ekistics Property Advisors LLP has in excess of 50 years and more than US$ 5.8billion worth of highly diverse investment, transaction and advisory experience, assembled during their current roles and while previously at Goldman Sachs, J.P. Morgan, Barclays and Lehman Brothers. Website: www.ekisticsproperty.com