AEW, acting on behalf of the City Office Germany Fund, has acquired “B5”, an office-led building in the Wilmersdorf district of central Berlin’s City West area. Following a final equity raise from institutional investors, the fund is now fully deployed with total assets under management increasing to approximately €345m.
The eight-storey building, which is located at Blissestraße in Berlin-Wilmersdorf and is 99% occupied, comprises c.15,900m² of multi-let office space across four interconnected buildings.
Originally built in 1971, half of the building is currently undergoing a comprehensive refurbishment by the vendor to improve the quality of space which is already being pre-let to a single tenant. Of the overall lettable area, 80% accounts for office space with the remaining 20% used for retail located on the ground floor.
The property is centrally located between the major routes of Kurfurstendamm and Bundesallee, as well as Fehrbelliner Platz and the city highway, and has excellent connections to local transport links. The investment offers the fund scope to drive significant value enhancement through the active asset management of space, through releasing space and growing existing rents, while also offering stable long-term cashflows from pre-let arrangements already in place on the office space that is currently under refurbishment.
Matthieu Samaran, Director of AEW's Düsseldorf investment team, commented: “We consider B5 to be a rare investment opportunity in terms of the quality of space, location and future tenant mix. Properties of this kind are not traded often in today’s market and upon completion of the refurbishment at the end of 2019, we believe our investors will benefit from an attractive value uplift.”
Lars-Henning Pylla, Fund Manager of AEW City Office Germany added: “We consider Berlin to be one of Europe’s most dynamic real estate markets and are therefore pleased to complete the Fund’s investment allocation in this top-tier city. In less than two years, we have demonstrated our ability to assemble a well-diversified German portfolio of institutional quality assets which provides our investors sustainable income with opportunities for value growth over the coming years.”