Tristan Fund kicks off new year with €110 Million in property deals in Austria and Germany (AU/DE)

The EPISO3 opportunity fund advised by pan-European real estate investment manager Tristan Capital Partners has completed three separate property transactions in Austria and Germany, which are worth a total of c. €110 million.

 European Property Investors Special Opportunities 3 (EPISO3) acquired two neighborhood shopping centers: one in Vienna immediately northeast of the city center and the other one close to the center of the German city of Bremen. The third transaction involved the sale of an office building in East Berlin acquired for the fund nine months ago from a commercial mortgage backed securities (CMBS) vehicle.

Ali Otmar, Managing Director of Investments of Tristan Capital Partners, said: “It’s been an active time for us during the festive period with the addition of these two well-located and well established retail assets in attractive markets. They fit squarely with the value-add strategy for the fund because they require creative asset management and refurbishment to reposition them and unlock their potential.”

The first retail acquisition is the acquisition of Shopping Centre Nord in Floridsdorf, a suburb 11 km northeast of central Vienna, for c. €75.0 million. The 36,000 m² shopping center is 85% occupied, with supermarket chain Merkur as the anchor tenant. The two-storey shopping center boasts further 82 national and international retailers including H&M, McDonald’s, Benetton and Marc O’Polo. The centre’s leisure facilities include a multiplex cinema and a paintball complex, while an adjacent multi-story car park provides space for 1,500 vehicles.

EPISO3 partnered with Blue Asset Management, which is responsible for asset management on the ground as well as tenant relationships and execution of the planned extensive refurbishment initiatives for the center. EPISO3 was advised by Freshfields Bruckhaus Deringer, PricewaterhouseCoopers and Jones LangLasalle. CBRE acted for the seller.

In Bremen, EPISO3’s second purchase was the 24,400 m² Walle-Centre in a residential district of the German city. It acquired the property from a closed-end fund in liquidation for c. €32.0 million.

The building opened in 1999 and has supermarket chain EDEKA as its anchor tenant, which has agreed to a lease extension subsequent to signing. Among the other 55 tenants are nationwide convenience retailers, such as Aldi, Rossmann, Tchibo and fast food chain McDonald’s. In addition, the center features a small office component that is predominantly let to the Bremen police department.

Kintyre Investments, based in Frankfurt, which sourced the transaction, has been selected as the local operating partner responsible for asset management of the center as well as tenant relationships. Kintyre Investments is also a minority co-investor. EPISO3 was advised by Ashurst and PricewaterhouseCoopers.

Ali Otmar concluded: “Both these properties enjoy dominant positions in residential districts and benefit from excellent transport links to the city centers of Vienna and Bremen. Although both assets have been well established and entrenched in their locations, they display a backlog of asset management. Once they have been repositioned, we anticipate they will appeal strongly to institutional investors, given their appetite for defensive retail-related properties.”

In a third transaction, EPISO3 has also sold the 14,900 m² Die Welle office building in the Lichtenberg district of East Berlin to private investors for €4.5 million. The sale of the property represents a successful exit at a 35% gross profit only eight months after acquisition by the Fund in April 2013 along with the Jannowitz Center in Berlin Mitte in a sale administered on behalf of a Cornerstone Titan Europe CMBS vehicle.

Source: Tristan Capital Partners

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