IVG Immobilien AG is to purchase two office real estate portfolios at €879 million for its own holdings. The portfolios of WestInvest Gesellschaft für Investmentfonds mbH and CS EUROREAL comprise 31 properties with a total rental space of 279,000 m².
IVG is to acquire 25 properties from an open-ended real estate fund
belonging to WestInvest Gesellschaft für Investmentfonds mbH for €505
million. All the properties are located in Germany and are concentrated
mainly in Munich, Hamburg and Dusseldorf. IVG is to buy six properties for
€374 million from the open-ended real estate fund CS EUROREAL of Credit
Suisse Asset Management Immobilien Kapitalanlagegesellschaft mbH. Two
properties each are in London and Paris and another two in Hamburg and in
"Our strategy is to further expand our own portfolio through strategic
investments in Europe and particularly in Germany", explains Dr. Wolfhard
Leichnitz, Chairman of the Board of Directors of IVG Immobilien AG.
Germany forms the investment focus, accounting for two thirds of the value
of these new acquisitions.
IVG sees potential for an increase in the value of the properties by
active letting: the average economic letting rate of the real estate
portfolios amounts to around 90%. The buildings were constructed or
modernised in the 1990s. They are in excellent condition and are located
in consistently good and superb locations.
Over the past few years, the prices and rents for office properties have
increased substantially in almost all of Europe's metropolises. Germany is
currently emerging as a strong magnet for international capital flows. As
key economic locations in Europe, London and Paris continue to record high
demand for modern office space.
"The upswing on the German office markets will continue to accelerate,
even as the economy grows. We also see the prospects in the markets in
London and Paris remaining bright. The acquisition of the portfolios
enables us to benefit from this trend and to strengthen our involvement
strategically in locations with sound growth prospects", said Wolfhard
Leichnitz, commenting on both portfolio purchases.