Hines acquires Karlshoehe office portfolio in Stuttgart for over €300m (DE)

Hines acquires Karlshoehe office portfolio in Stuttgart for over €300m (DE)

Hines, acting on behalf of its Hines European Value Fund (HEVF), has acquired the Karlshoehe portfolio in Stuttgart for over €300m. The portfolio consists of 13 office buildings including two towers and totalling more than 90,000m² of NRA. The portfolio is 98% leased, largely to Allianz. The buildings benefit from a strong CBD location in a true mixed-use, office and residential quarter on a prestigious Karlshoehe site which serves to connect the CBD and an urban neighbourhood. The buildings are in close proximity to the suburban train station “Stadtmitte” and Karlshoehe Park.

 

The Karlshoehe Portfolio has served as Allianz Life Insurance’s historic headquarters since 1927 and they have gradually expanded into new buildings in the surrounding area over time. Allianz will develop a new campus at Stuttgart-Vaihingen to consolidate its Stuttgart inner-city locations. After continuing a close relationship with Allianz as the key tenant in interim, Hines ultimately plans to evaluate each component piece of the portfolio to achieve its highest and best use, likely including refurbishment and re-letting of office space and conversion and redevelopment of new space.

 

The acquisition of the Karlshoehe Portfolio is HEVF’s second investment into the Stuttgart office market and the sixth investment by the fund since December 2017. Over 50% of the Fund’s €721m investor equity commitments are now allocated to a diversified portfolio including office, retail, hotel, apartment and logistics in Germany, Denmark, Spain and the UK.

 

Emanuel Coskun, head of Hines’ Stuttgart office, said: “Hines has a large existing portfolio in Stuttgart with six assets in various sectors and submarkets across the risk spectrum from Core to Development, having invested in Stuttgart on behalf of both of Hines’ discretionary European funds the Hines European Core Fund and the HEVF. Our local team has significant expertise in development, asset management and value creation and we are eager to create new value in the Karlshoehe Portfolio. We strongly believe in both the historical quality and future potential of this central neighbourhood. As Swabian natives, we take great pride in stewardship and improvement of the city’s urban fabric. We look forward to working with Allianz and city authorities, on this exciting next chapter for the Karlshoehe quarter.”

 

Paul White, HEVF Fund Manager, said: “The acquisition of the Karlshoehe Portfolio demonstrates HEVF’s strong belief in the Stuttgart market. The city attracts a highly diversified occupier base for office space, including the financial and insurance sectors, but also sophisticated technology bases for manufacturers, engineering and other industrial corporations. The fundamentals in Stuttgart are exceptionally strong even amongst the major German markets, with unmet demand, effectively no central Class A vacancy and a positive trajectory for rents. Likewise, for residential markets, Stuttgart continues to attract and retain more affluent office-using employees and is also experiencing the wider trend of increasing appetite for more central urban living, leading apartment rents and prices upward. For these reasons, we have great confidence in this large-scale, inspiring investment.”

Related News