Hamburg-based DIFA Deutsche Immobilien Fonds AG has disposed of its majority holding in the 52-storey "Figueroa at Wilshire" tower, which provides approximately 97,000 m² of office space in downtown Los Angeles, for $261.5 million.
This is significantly higher than the total original investment and the last valuation figure. Trizec Properties, a US Real Estate Investment Trust (REIT) headquartered in Chicago, is the purchaser of this DIFA and Hines-held property, in which open-ended real estate fund DIFA-GRUND acquired an 80% stake in February 2004. "Despite the fact that a lot of the building will require reletting over the next few years, the investment demand in downtown LA is currently so great that we chose to cash in on our investment now," says DIFA board member Dr. Reinhard Kutscher. The profits will be reinvested in the North American market over the medium term.
Almost simultaneously DIFA exploited cyclical opportunities in the London office market to complete a substantial transaction for DIFA-Fonds Nr. 1: DIFA has sold the fund's Sanctuary Buildings to Tamilan Holdings Limited for around £143 million. Acquired in 1997, the sale price achieved for this property also exceeded the most recent expert valuation by a considerable margin. "The sale of Sanctuary Buildings means we have realised excellent appreciation for the fund," continues Kutscher, who is unconvinced of development prospects in the London Victoria area with its concentration of government use.
Since its establishment, DIFA - a member of the Union Investment Group - has applied a dynamic asset management policy to its real estate funds: almost 150 sales have been made as part of a strategy that aims to continuously optimise the portfolio. "The increasingly global assets provide more diverse opportunities to benefit from cyclical market developments and - as in the USA and the UK - to realise significant gains within a shorter timeframe," adds Kutscher. In July the real estate investment company successfully disposed of a former project development by selling the Julián Camarillo office building in Madrid.