EPISO 5, the value-add/opportunistic fund advised by Tristan Capital Partners, revealed a trio of German commercial property acquisitions, totalling just over €250m. The most recent deals take the combined value of the pan-European real estate investment manager’s 11 acquisitions and sales in Germany to date in 2019 to around €900m and with a further €200m of transactions in the pipeline, Tristan is set to exceed the €1bn milestone by year-end.
The three new deals that the Tristan-managed EPISO 5 opportunistic/value-added fund has recently closed on include:
• €62m – A portfolio of five good quality office buildings located in established office submarkets of prime German cities, including Munich (2 assets), Frankfurt, Dusseldorf and Hildesheim.
• €91m – An under-rented and well-located office building and land plot with an expected 10,880m² buildable area in the North Munich micro-location of Milbertshofen.
• €99m – Development site with the potential for 30,000m² of office and commercial space in Berlin’s up-and-coming Neukolln district, including two office towers and a flexible light production space
Ali Otmar, Senior Partner and Deputy Head of Investments at Tristan, said: “Tristan has been investing in Germany since 2002 and over the past couple of years it’s become even more of a strategic priority for us. Over the past year, we have been focussing on well-located assets in the more supply-constrained sub or secondary markets around Munich, Frankfurt and Dusseldorf, completing around €900m of acquisitions so far in 2019. Including the most recent deals completed for EPISO 5 and those in the pipeline, our total AUM in Germany across all funds now stands at around €2bn. There’s a lot of noise this year around the outlook for the German economy. While we may well be witnessing a mid-cycle economic slowdown, growth is only one side of the equation in real estate markets. Two decades of investing in Europe have taught us that capital markets tend to overestimate the effect of demand and underestimate the impact of supply. While there are pockets of development activity, primarily in Berlin, the office market in Germany continues to be chronically undersupplied, putting limited downward pressure on rents and creating a great opportunity for us to ‘manufacture’ core assets.”
