Listed German property firm DIC Asset announced on Friday that it has raised over €800 mln in equity commitments for a new special fund which is set to become the largest investment vehicle in the company's history.
The fund, which is being launched through its GEG subsidiary on behalf of a club of domestic institutional investors, is expected to reach a size in the medium-long term of around €1.6 bn.
‘We are very proud to say that we were able to win the trust of many new investment partners for this fund. For the fund launch, DIC Asset has put together an attractive seed portfolio of four assets with a combined value of €780 mln. We will use the already fully subscribed equity capital to move ahead with additional promising investments,’ commented Christian Bock, Chief Institutional Business Officer (CIBO) of DIC Asset.
As investment manager of the fund, GEG will generate both transaction fees and earnings from the ongoing asset management and property management.
The core investment fund will invest in properties occupied by blue-chip tenants with long-term lease agreements. It is initially being seeded with four assets worth some €780 mln and located in the Rhine-Main region. The assets which include the Deka Office Hub in Frankfurt and the Wilhelminenhaus in Darmstadt are fully occupied with a weighted average lease term (WALT) of more than 18 years.
The Deka Office Hub is a high-end new-build property developed by Lang & Cie. Real Estate and Wentz & Co. with around 47,000 m2 of lettable area, located in the dynamic Lyoner Viertel locality of Frankfurt am Main. The DGNB Gold-rated property is scheduled to be fully completed by 2022. Its incoming occupier, Deka Bank, is planning to move around 3,500 of its Frankfurt-based employees to the new offices within the framework of a top-down location strategy.
The Wilhelminenhaus asset in Darmstadt will transfer from the property portfolio that DIC Asset owns outright into the portfolio of the newly-launched fund. Extending over around 25,700 m2, the property underwent an extensive energy refurbishment in recent years, and is occupied by a blue-chip public sector client, the Darmstadt Regional Council of the State of Hesse, on a long-term lease.
‘The 'Wilhelminenhaus' gave us yet another chance to showcase the performance of our active real estate management platform. Following its successfully completed modernisation and its transfer into the portfolio of the new fund, we will keep managing this attractive asset and thereby generate a steady income from property management. Our investment partner can keep relying on the know-how of an asset manager who has been thoroughly familiar with the property for a long time,’ elaborated Sonja Wärntges, Chief Executive Officer (CEO) of DIC Asset.