Europa Capital launches core-plus initiative with Mitsubishi Estate London

Europa Capital has completed, on behalf of Mitsubishi Estate London, an affiliate of its principal shareholder, Mitsubishi Estate, the acquisition of a 22,000 sqm multi-let office building in Unterfohring, Munich. The property, at Feringastrasse 10-12, was acquired from Ekistics Property Investors 1 LP, a value-add focused private equity real estate fund advised by Ekistics Property Advisors LLP.

This marks the launch of a new core-plus initiative on the part of Europa Capital in European offices, initially into the principal German cities and followed in due course by other core European office markets, as part of a continuing drive by Mitsubishi Estate to expand and diversify its overseas portfolio. The intention in the medium term is to attract other institutional investors by offering an exposure to Europe’s principal office markets, once critical mass is achieved. Europa Capital will asset manage the portfolio.

The property, constructed in 2003, is currently 88% let to a diverse tenant base at rents below market levels and offers reversionary potential. This reflects the tone of the wider Munich office market, which offers significant rental growth prospects due to the current significant supply/demand imbalance. Munich is one of the top European destinations for institutional investors at present, due to the strong macro-economic and real estate fundamentals of the city. Unterfohring is one of the established submarkets to the north of Munich, close to the city’s airport, which, consistent with the broader market, is currently suffering undersupply, and with a limited pipeline of new accommodation in the medium term.

Nic Fox, Partner at Europa leading its business in Germany, commented: “This off-market acquisition marks the beginning of a new product line in a lower risk area from our pan-European value-add funds. We strongly believe in the continuing performance of the German economy and property market and intend to assemble a diversified portfolio, attractive to institutional investors”.

Yuichiro Shioda, managing director and CEO of Mitsubishi Estate London, said: “The real estate fundamentals underpinning both this building and the wider Munich office market make this an excellent initial acquisition for the new partnership with Europa Capital. As we build this new portfolio, we will be targeting further acquisitions in similarly strong markets across continental Europe”.

Ekistics was advised by BNP Paribas Real Estate in relation to this divestment and had retained Elystan Capital Partners GmbH as its local operating partner over the life of this project. Savills advised Europa Capital on the acquisition.

Source: Europa Capital

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