AEW has advised on the sale of the entirety of the shares of the AEW City Office Germany Fund, reflecting the real estate portfolio known as the Selection Portfolio, to a fund managed by Tristan Capital Partners (Curzon Capital Partners 5 LL). The portfolio comprises seven offices, totalling circa 83.000m², in the cities of Munich, Berlin, Hamburg, Dusseldorf, Frankfurt and Cologne. Through a tailored active asset management programme, AEW increased occupancy across the properties by 15% to 98% and increased rental income by 22%, with current net rental income now at around €16m per annum. New long term leases were signed with all of the major tenants, aligning the letting structure of the portfolio and significantly increasing the security of the income stream. The purchase price was not disclosed.
Marc Langenbach, Head of Funds & Separate Accounts Germany, from AEW said: “Our strategy was to carefully assemble a set of well-located offices in six of Germany’s major cities, where we could add value through active asset management, including repositioning and leasing to drive the capital value and income quality of the properties. We think it is the right time to crystallise the value for our investors who signed up for the Fund in the first subscription phase. I’m pleased that the success of the strategy means that we have already been able to secure capital commitments for the next fund in the series, the AEW City Office Germany II, for which we are actively building a pipeline of potential investments.”
Lars-Henning Pylla, fund manager at AEW, said: “We are pleased that despite the current volatile market environment in times of Covid-19, we have successfully completed a transaction of this size through focused portfolio steering and, at the same time, achieved exceptionally good performance for our investors.”