Global investment manager AXA Investment Managers - Real Assets (AXA IMRA) has created a new German business park joint venture with business parks specialist Sirius Real Estate.
The joint venture, known as Titanium, has been formed following AXA IMRA's acquisition, on behalf of clients, of a 65% stake in a diversified seed portfolio of five properties valued at €168 mln from Sirius Real Estate.
'This transaction allows us to invest in an attractive portfolio of assets and provides us with immediate scale in this important asset class in Germany, a geography that we are actively growing in,' said John O’Driscoll, European head of transactions at AXA IMRA.
'This transaction also enables us to establish a long term joint venture with Sirius Real Estate, a leading operator and investor in branded business parks in Germany. We look forward to working with them on this portfolio and on future opportunities,' O'Driscoll added.
The five single asset special purpose vehicles comprise two business parks located in Berlin (Berlin Borsig and Berlin Tempelhof) and one in each of Mainz, Nurnberg and Bayreuth, providing a combination of office, warehouse, industrial and storage space.
According to Sirius, the implied property value of €168 mln equates to a gross yield for the portfolio of 6.2% and reflects a premium to the last reported book value as at 30 September 2018 which was €141.1 mln. Total cash commitment from AXA IM - Real Assets amounts to €43.9 mln. The transaction is expected to generate total cash proceeds of more than €70 mln for Sirius after refinancing and expected related costs.
Sirius has signed an agreement to continue the operation of the assets, which comprise some 191,000 m2 net lettable area, on a fee basis. The joint venture said it would probably seek to acquire further assets in Germany.
'The formation of this relationship represents an important opportunity for both parties and it will give Sirius key advantages in an increasingly competitive market and through the real estate cycle,' said Andrew Coombs, CEO of Sirius. 'This will increase the company’s ability to create value for both its investors and the JV from which the company will benefit as both the manager and as an equity partner.'