Standard Life Investments has announced that it has made its first acquisitions in the German property market as part of a €91-million strengthening of its European Property Growth Fund (EPGF).
EPGF has purchased a single let logistics warehouse in Neuss, Germany. The €17-million acquisition consists of 22,000 m² of warehousing space and represents an attractive yield corresponding to the high quality of the building and the tenant. It is let to Asics Europe BV, the sportswear manufacturer, and is situated in an established distribution location 1km east of the A57 motorway.
The Fund's second German acquisition is an industrial estate in Rattingen, located to the north of Dusseldorf close to Dusseldorf airport. Purchased for €15 million, the estate is multi-let with some vacancy covered by a rental guarantee.
Further acquisitions for EPGF continued in Central Europe with the €13.2-million purchase of a single let retail warehouse in Brno, the Czech Republic's second largest city. Let to the furniture retailer Sconto Nabytek it totals 13,200 m² and represents an initial yield of 6.91%. In addition, EPGF committed €38 million to Hungary via a portfolio of three properties two modern fully let logistics warehouses at Gyor and Jaszbereny (let to a Hungarian subsidiary of Renault and Hilite International respectively) and the forward purchase of a pre-let distribution facility in Budapest.
Other activity included a 14,195-m² extension to a logistics warehouse near Willebroek, Belgium.
Will Fulton, Manager of the European Property Growth Fund, Standard Life Investments, said: "With another €91 million invested in bricks and mortar, the portfolio has remained focused on acquiring high quality commercial properties with excellent prospects for growth. In line with this theme of growth we have made our first investment into Germany. Having purposefully stayed out of the German market for 10 years, our analysis of pricing against improved economic confidence highlights an increasing demand for industrial and logistics service providers."
"We have also continued our investment in Central Europe with the purchase of our first retail property in Brno, Czech Republic and strategic logistic assets in Hungary. Along with a healthy yield margin over Western Europe, the Czech Republic benefits from high consumption growth which in turn is an excellent driver for rental growth."
"Taken together, these acquisitions will serve to sustain the strong performance that the European Property Growth fund has generated since its launch. The outlook for the commercial property market in Europe remains attractive and I am looking forward to announcing further acquisitions we are working on in the near future."
Source: Standard Life