DEGI Deutsche Gesellschaft für Immobilienfonds mbH is getting closer to its goal of establishing a diversified German property portfolio of roughly €0.5 billion for DEGI GERMAN BUSINESS by the end of this year. The company has now invested for the fund a total of €60 million in a group of five office properties in Hanover. The seller was Eurohypo AG.
This means that the property assets of the fund for instititutional investors and affluent clients, which is basing its strategy on the upswing in the German business property market, now has a total value of roughly €120 million spread across eight properties in four locations in Germany.
The office buildings with a total floor space of 29,574 m² and 542 parking spaces are located in the extensively redesigned Pelikan quarter in the List district of Hanover, a well-established office market in the Lower Saxony capital. The buildings themselves vary in their size (900 m² to 13,500 m² office space, two-seven stories) and tenants; the only similarity lies in the high quality and modernity of their fittings and facilities. The main tenants are N-Bank (Investitions- und Förderbank Niedersachsen GmbH), IKK Niedersachen, HDI Rechtschutz Versicherungs AG and SSA Global Technologies GmbH. The area is well connected to the expressway system and there are direct links to the city center in the form of three S-Bahn railway lines.
Stable location with attractive yields
With its total office space of 4.2 million m² and vacancy levels of roughly 5%, Hanover is regarded as a stable regional location offering a relatively high yield in comparison to the major investment centers. "Things are currently looking up in general for the German commercial property market, but an important success factor for the fund is the right blend of office, retail and logistics as well as striking a balance between properties in stable regional locations on the one hand and dynamic investment centres on the other," says DEGI Managing Director Thomas Linker. As planned in the fund concept, the equity for the investment was collected from the investors shortly before concluding the transaction in a so-called 'cash-call'.
Frankfurt-based qReal Consult acted as consultant to DEGI on the transaction.