Fidelity Worldwide Investment’s real estate team has completed five acquisitions across Europe totalling almost EUR80m for the firm’s Eurozone Fund.
These consist of a series of individual transactions with a variety of domestic and international investors concluded in the latter part of 2012 and early 2013.
The acquisitions are:
Berlin office and retail building – Kurfürstendamm: A near-prime asset located on Berlin's well-known retail boulevard, this is an opportunity to capture rising values in an under-valued European capital city. There is significant potential to reposition the asset over the coming years. The acquisition yield at just over five per cent reflects the under-rented nature of the property.
Stuttgart logistics – Ostfildern: Servicing the Greater Stuttgart region for DHL's global forwarding division, this is a strategic logistic asset both from the view of the tenant - who has taken a 10 year lease on the newly extended property - and the new owner. This was acquired for a yield of 7.1 per cent.
Munich storage – Fürstenfeldbruck: This is a modern, high-specification, high-bay warehouse with an unusually long lease to Iron Mountain, the global leader in data archiving. Fidelity has also acquired a site adjacent to the property so is well positioned to support the tenant with future expansion plans at this location. This investment was acquired for a yield of 8.1 per cent.
Paris office – Suresnes: Well-located in the western suburbs of Greater Paris, this modern and attractive office building is let in its entirety to the US corporation Lexmark. Fidelity was able to negotiate an attractive price and secure a high yield of 7.5 per cent for a well-let asset.
Dutch office – Hoofddorp: A brand new office building designed to BREEAM Very Good standard and let to Sonion, a global leader in advanced miniature hearing instruments. Located just 5km from Schiphol Airport, this investment was secured at an attractive yield of 8.4 per cent
Keith Sutton, director of European real estate in Fidelity’s Munich office, says: “These deals showcase our strategy of targeting high quality, ‘second tier’ assets in established markets let to high quality tenants. With acquisition yields often in excess of seven per cent, the market today presents a rare opportunity to lock into highly attractive assets at very favourable prices. As equity investors, we are welcomed by vendors who seek a reliable counter-party.
"Clients are showing increasing interest in our strategy and we have already won new equity commitments this year. We expect to be investing a further EUR150m to EUR200m for this fund alone during the course of 2013. We shall continue to be very selective in our choice of assets."