HSH Nordbank has financed the acquisition of an extensive portfolio in the Netherlands for a European real estate investment fund managed by UBS Global Asset Management. An agreement to finance €69.6 million over three and a half years was signed to cover the purchase of six commercial properties in Amsterdam, Rotterdam, Schiphol and Hoofddorp.
The investor is the UBS Euro Value Added Real Estate Fund, an institutional closed-end real estate fund under Luxembourg law. The strategy of this Fund, which counts a number of large European institutions amongst its investors, consists of acquiring commercial real estate that requires repositioning or refurbishment and subsequently selling the properties once they have been repositioned. The vendor of the portfolio is a German open-end real estate fund.
The portfolio consists of five office properties and one mixed office logistics property with total floor space of about 68,000 m², all of which are located in what is known as the Randstad area of the Netherlands. Two of the buildings are fully leased (KPMG in Amsterdam and Debitel in Hoofddorp). The other properties have between about 35% and 80% vacancy. UBS Global Asset Management sees great potential for the assets and expects to source new tenants for the properties.
"The Netherlands will remain a promising market for investing in office real estate particularly during the general economic recovery," said Bernhard Visker, head of HSH Nordbank's real estate business and future member of its management board. "We expect the Dutch office market to bottom out this year and are already seeing signs of recovery in some regions."
Rental growth has accelerated in second half of 2006. Overall, office vacancies rates in the Netherlands could come down slightly thanks to the increased growth from which we expect newer properties in prime locations to benefit.
Given the significant interest among international real estate investors, the Netherlands remains an attractive location for investing and the number of suitable office properties has become scarce. "For the medium and long term, the Netherlands stands out as a stable real estate market that will grow due mainly to the high liquidity in the rental and investment markets, and which furthermore is very transparent," says Visker.
Source: HSH Nordbank