BlackRock Eurozone fund secures first two acquisitions

BlackRock Real Assets has secured its first two investments in sought-after sectors in Germany for its new Eurozone Core Property Fund, the company has revealed.

The firm said the acquisitions took place for an undisclosed price last year, but it has only just made the details public. BlackRock also revealed that the fund – which held a first close on €415 mln from 8 investors last May - is planning to diversify its exposure via investments in France and the Nordics.

In the first Germany deal, it has acquired a Grade A freehold office property in the ‘City Sud’ submarket of Hamburg, one of the fund’s core markets for its German investment strategy. The second acquisition is a portfolio of two Grade A freehold logistics warehouses in Munich and Regensburg.

The seven-year old City Sud building, built in 2011 and measuring 15,700 m2, is 94% occupied by multiple tenants. BlackRock said the fund would look to increase rental income through asset management.

The recently-built (2017 and 2014) logistics warehouses, totalling 43,000 m2, are fully occupied by a well-rated single pharmaceutical logistics tenant for a remaining term upwards of nine years. This investment establishes the fund’s foothold to modern high-quality logistics assets in two very strong logistics locations in Germany, BlackRock said.

Ian Williamson, portfolio manager of the Eurozone Core Property Fund, said: ‘These deals demonstrate the strength of our local German investment team, who have successfully sourced high quality product, and completed detailed due diligence processes under tight timeframes.’

Strong fit
Williamson said the acquisitions were ‘a strong fit’ for the fund in light of positive economic and demographic forecasts for Germany, and deal-specific characteristics.

‘We expect them to be accretive to Fund returns while also remaining liquid in the long run,’ Williamson said.

Both acquisitions are DGNB Gold-rated and fit within the fund’s environmental strategy.

Hamburg’s City Sud is a growing submarket with affordable rents compared to the city centre. Recently, businesses have been moving into the area. The building is a short walk from the Hamburg-Hammerbrook S-Bahn station, which is one stop away from Hamburg’s Central Station.

BlackRock said the fund has an active pipeline of investments and is planning to diversify its exposure with investments in France and the Nordics.


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