Wednesday, 3 September 2014
Tristan Fund sells Dusseldorf residential/retail complex for €70.5 million to BVK, German Pension Fund (DE)
CCPIII, the core plus fund advised by pan-European real estate manager Tristan Capital Partners, has sold the Dieterich Karree residential/retail complex in downtown Dusseldorf’s Pempelfort district to Bayerische Versorgungskammer (BVK), Germany’s largest public pension fund, for €70.5 million and a 5.2% initial yield.
Ben Newman, Managing Director, Portfolio/Asset Management at Tristan Capital Partners said: “This deal had a particularly complex and interesting history as it was owned by well-‐known German real estate investor Ignatz Bubis before passing to the lenders on the properties after his death in 1999. The legal complexities and the subsequent lack of investment signalled to us that it had a number of the key broken facets that Tristan’s prides itself on fixing. On its purchase in mid-2011 with PAMERA as a co-investor we were confident that the German residential and retail markets were set for a strong run, as indeed has occurred, so we have comfortably exceeded our return target for the CCPIII Fund on this transaction.”
The Dieterich Karee complex consists of several buildings around a quiet innercity courtyard and has 18,300 m² (282 units) of residential and 11,300 m² of retail area, as well as a 660-space underground parking garage. The building is 95% occupied with an average lease term in the retail area of over 12 years. Edeka, Aldi, Sparkasse and DM are the main retail tenants.
Jean Philippe Blangy, Executive Director Portfolio and Asset Management at Tristan Capital said: “Having acquired the property through a foreclosure process, we have, together with our operating partner and co-investor Pamera Asset Management, completely reconfigured and repositioned the retail space signing new long term leases for the entire space and increasing the average lease term from 2.2 years on acquisition to 12 years at the point of sale. After also completing the significant renovation of the residential areas ahead of schedule, we have successfully transformed the investment into a quality institutional product.”
Tristan was advised by Clifford Chance and Colliers.