(LONDON) – Hines, the international real estate firm, has acquired the Atrium Charlottenburg office building in Berlin, for a price in excess of €160 million on behalf of the Hines European Value Fund (HEVF). The building consists of up to nine floors of offices and offers a Net Rentable Area (NRA) of 40,000 square meters.
Located on Berlin’s Kaiserin-Augusta-Allee, the building is 100% leased to tenants including Land Berlin, Jobcenter Berlin Charlottenburg-Wilmersdorf and Fraunhofer FOKUS. The building benefits from a good and improving inner city location within Berlin’s S-Train circuit as well as flexible floor plans. Located close to the “Mierendorffplatz” subway station, the building is within close proximity to Berlin’s City West area, the Zoologischer Garten, Berlin’s main station Hauptbahnhof and highway A100.
Atrium Charlottenburg has served as the headquarters of Fraunhofer-Institut für Offene Kommunikationssysteme FOKUS since 2003 and today the research institute occupies around 15,000 square meters, including a meeting and conference area. Fraunhofer FOKUS specializes in applied research and development in the field of information and communication technology. Regional government tenants Land Berlin and Jobcenter Berlin Charlottenburg-Wilmersdorf add to the building’s high-quality tenant mix.
Over the coming years Hines plans to identify and evaluate potential upgrades, improvements and modernizations to the building, likely including construction as well as (re-)letting activities that are anticipated to generate significant rental uplift within the building.
The acquisition of Atrium Charlottenburg is HEVF’s first investment into the Berlin office market and the seventh investment by the Fund since December 2017. Over 65% of the Fund’s €721 million investor equity commitments are now allocated to a diversified portfolio including office, retail, hotel, residential and logistics in Germany, Denmark, Spain and the UK.
Dr. Kai-Magnus Schulte, director of Hines, said, “We are happy to have secured this exciting investment opportunity for our Hines European Value Fund. The building offers a rare combination of a good inner-city location, high flexibility, a very strong tenant line-up and substantial potential to create value through physical improvements and leasing activities. Our local team has significant expertise in development, asset management and value creation and we are eager to create new value in the Atrium Charlottenburg.”
Christoph Reschke, senior managing director of Hines, added, “Our great confidence in Berlin's excellent long-term prospects and development is ongoing and it is our strategy to overweight Berlin exposure. The current sentiment in the office market is leading to a substantial uplift of non-traditional office locations within the inner-city. As such upgrading of existing buildings in these locations have become a viable addition to speculative developments and buying core. Atrium Charlottenburg is already benefiting from this transition which will continue further in the future.”
Paul White, HEVF Fund Manager, said, “The acquisition of the Atrium Charlottenburg demonstrates HEVF’s strong belief in the Berlin market and strong rental growth. The city attracts a highly diversified occupier base for office space, including research and technology. The fundamentals in Berlin are exceptionally strong with a positive trajectory for rents. The asset offers an attractive balance of secure income alongside the opportunity for value creation.”
Landesbank Hessen-Thüringen Girozentrale (HELABA) served as the financing bank in this transaction. Hines was legally supported by Pöllath + Partners, technically supported by Arcadis, and tax as well as structure advise was provided by BakerTilly. BNP Paribas Real Estate acted as transaction advisor on behalf of the vendor.
Hines is a privately owned global real estate investment firm founded in 1957 with a presence in 219 cities in 23 countries. Hines has approximately $124.3 billion of assets under management, including $63.8 billion for which Hines provides fiduciary investment management services, and $60.5 billion for which Hines provides third-party property-level services. The firm has 148 developments currently underway around the world. Historically, Hines has developed, redeveloped or acquired 1,362 properties, totalling over 449 million square feet. The firm’s current property and asset management portfolio includes 514 properties, representing over 222 million square feet. With extensive experience in investments across the risk spectrum and all property types, and a pioneering commitment to sustainability, Hines is one of the largest and most-respected real estate organizations in the world.
Since entering Europe in 1991, Hines has grown its European platform to include offices in 16 cities as well as a presence in 47 cities in 12 countries, with €18.2 billion of assets under management in Denmark, Finland, France, Germany, Greece, Ireland, Italy, Netherlands, Poland, Spain and the United Kingdom.
Visit www.hines.com for more information.
About Hines European Value Fund
HEVF is a Euro-denominated, Luxembourg-based investment fund launched in July 2017. Managed by Hines, its objective is to acquire a portfolio of core-plus and value add commercial real estate throughout Europe on behalf of an institutional investor group.
In August 2018 Hines announced the final closing of HEVF, with the total fund size exceeding €720 million of equity commitments, surpassing its original target by more than 40%. As the flagship value add fund for Hines in Europe, HEVF has a geographic mandate across the European Union (plus Norway) and flexibility of scope to invest in office, retail, logistics, residential and mixed-use opportunities in primary institutional markets.