AEW has completed the second disposal on behalf of Europe Value Partners, its pan-European value add strategy. The office asset was acquired in December 2018 in a JV with Catella Asset Management Germany (CAM) and was sold to a private German investor. The asset is located on Blasewitzer Strasse, east of Dresden city centre, and was acquired as part of a strategy focused on the growth potential in the Dresden market. Located 10 minutes from the city centre by public transport and providing flexible office accommodation, the building was well placed to satisfy the growing demand for offices as a result of the fast growing local economy.
The property comprises a total lettable area of approximately 16,200m² over five floors together with 170 basement car parking spaces and at the time of acquisition was significantly under-rented, with a short WAULT providing potential for rental uplift. During the 15 months of ownership, 70% of the leases have been renegotiated increasing the WAULT from 3.5 to 5 years and establishing ERVs some 50% above passing rents at time of purchase.
Russell Jewell, Head of Private Equity Real Estate, commented: “This early disposal has delivered above expectations and underscores our conviction that the European market continues to offer value add opportunities for investors provided you have the capability and network to access them. While transaction negotiations were underway before the onset of COVID-19 pandemic, we’re pleased that it did not impact our ability to complete efficiently and deliver attractive returns. Following another office disposal in Utrecht, the Fund has now returned c.65% of the original equity to investors.”
Andreas Hauff, Managing Director of Catella Asset Management Germany, added: “Based on our experience in Value Add Investments in general and our expertise in the Dresden market we were able to execute the business plan much faster than predicted. The now stabilized asset will be an excellent long-term investment in one of Germany’s dynamic cities.”
