HSH Nordbank has financed the acquisition of the landmark office property Haagse Poort in The Hague on behalf of U.K. investment bank Evans Randall. The Banks Real Estate Office in Amsterdam headed by Peter Rijsbergen has agreed with the investor to provide €180 million in long-term financing and €30 million in equity interim financing. The structure of the financing also includes derivatives for interest-rate hedging purposes.
The sale of KanAm to Evans Randall constitutes the largest transaction involving a single property on the Dutch market in 2006. The landmark building measuring 270 meters in length and with nearly 68,000 m² in space for lease on 18 storeys has been fully leased to ING Bank of the Netherlands on a long-term basis. This purchase marks the first investment by the London-based investment firm on the European continent.
Bernhard Visker, Head of HSH Nordbanks Real Estate segment, commented: This finance deal shows once again that we are an increasingly sought-after partner for large international property transactions and that we are able to operate successfully on the market even when conditions are difficult. The Bank carried out this off-market transaction within a few days, in collaboration with its Dutch advisers CBRE and Boekel de Nerée.
In view of the strong interest among international property investors, the Netherlands will remain in focus even though the number of attractive office properties has become very small and vacancy rates remain high, explained Visker. He added that initial net returns on offices have fallen substantially and that they come to no more than between 6 and 7% in the central locations of metropolitan areas. For very good locations and properties with good tenants and long-term leases, initial net returns of approx. 5.5 % to 5.8% are being paid for the first time.
According to a market analysis conducted by HSH Nordbank, the Netherlands remain an interesting investment market for office properties as its economy is generally expected to recover. All in all, the Dutch office property market is expected to bottom out in 2006. In some regions and locations, the market probably bottomed out already at the end of 2005 and is now showing discernible signs of a recovery.
In the medium to long term, HSH Nordbank considers the Netherlands to be a stable property market characterized, above all, by the high liquidity of its rental and investment markets and by general transparency.
Source: HSH Nordbank