PATRIZIA Immobilien AG makes debut UK acquisitions (UK)

PATRIZIA Immobilien AG, the European investment manager, announces its first acquisitions in the UK. The deals follow on quickly from the completion of its acquisition of Tamar Capital Group, the London-based real estate investment and asset management company. Both assets have been acquired in a joint venture between Patrizia and funds or accounts managed by Oaktree Capital Management, L.P.

Edmund House, Edmund Street, Birmingham was acquired from clients of Aberdeen Asset Management for £8 million, reflecting a net initial yield of 10%. Located in the prime office pitch in Birmingham city center, the building provides 80,000 ft² (approx. 7,432 m²) of accommodation of which approximately 30% is currently vacant. Tenants in occupation include Gresham Trust, Lloyds Bank and Eversheds.

PATRIZIA and Oaktree will look towards refurbishing and re-launching the property into a market that is starting to experience a shortage of quality accommodation in the core area.

PATRIZIA and Oaktree were advised by CBRE and the vendor by GBR Phoenix Beard.

In the second transaction, PATRIZIA and Oaktree have acquired 3, The Arena, Bracknell from SWIP for £7.03 million, reflecting a purchase yield of 14%. The 44,000 ft² (approx. 4,087 m²) office building is located adjacent to Arlington Business Park, the prime office location in Bracknell. The property is let for a further 5.5 years to JDA and offers a good income return with a strong residual value.

PATRIZIA and Oaktree were advised by Jones Lang LaSalle and the vendor by Capita Symonds.

James Muir, managing director of PATRIZIA’s UK business, commented “We have been actively monitoring the UK market for some time and, following the recent expansion of our UK business through the acquisition of Tamar, believe we have the right team, led by Rob Brook, and platform in place to identify attractive segments of the market. At present, UK regional markets present an opportunity, on a selective basis, to acquire attractive assets at an opportune time in the market with the prospect to add value through asset management".

Both of the recent property acquisitions were completed with joint venture partner, Oaktree. David Snelgrove of Oaktree commented, “We are excited about these recent UK acquisitions, which reflect part of our UK real estate strategy of acquiring direct real estate assets with value-add potential, acquiring sub and non-performing loans collateralized by commercial real estate and working with borrowers to recapitalize capital structures.

"Both of the assets acquired offer opportunities to create value through proactive asset management, and we look forward to working closely with Rob Brook and his team to deliver on the business plan."

Source: FTI Consulting

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