Corestate Capital Holding has acquired a further value-add commercial property in Munich with an investment volume of around €54m. The value creation potential of the property will be leveraged as part of the company's manage-to-core strategy. The deal has already been signed, closing is scheduled for the end of May 2019.
The property, located at Am Schatzbogen, has a total GLA of 22,635m² and 260 parking spaces. Just under two-thirds of space is used for offices, 15% for storage and the rest consists of production areas, a nursery and other types of use. The property has a diversified tenant base, is in good condition in terms of technological infrastructure and conveniently situated in an established micro-location in Munich’s East which is becoming increasingly attractive for office space. The transport links are very good; travelling by car from the city centre, the location can be reached in just over 15 minutes.
“We will turn this property into an attractive asset for both tenants and investors again, essentially through modernisation. The main value driver for us is the current leasing potential of the property. Although its current occupancy rate is 88%, which means that its cash flow is high, we expect rental income to increase by around 30% after modernisation, given the average rents achievable in the area. Following completion of renovation works, we seek to achieve full occupancy and a significant increase of the property’s profitability while creating long-term value”, said Thomas Landschreiber, Co-Founder and Chief Investment Officer of Corestate.
