Danish pension fund PFA lands €1b German portfolio

Danish pension fund PFA has acquired the ‘Century’ portfolio in Germany from listed housing landlord Industria Wohnen in its biggest transaction ever.

The portfolio consists of one commercial building and 33 residential assets with over 3,700 units located in more than 15 locations across Germany. Two-thirds of the assets are situated in big metropolitan centres, including Berlin, Munich and Hamburg.

The portfolio’s total area is 247,300 m2, mostly allocated to residential space.

‘We recently announced our intention to significantly increase the proportion of real estate in our portfolio by 2022. We are now implementing this new strategy, the central component of which is the expansion of our investment activities outside Denmark,’ explained Michael Bruhn, head of real estate at PFA.

PFA is the largest commercial pension fund in Denmark and the fifth-largest in Europe, with a €80 bn balance sheet.

First direct acquisition in Germany
The deal not only marks the biggest transaction in PFA's history, it is also its first direct acquisition in Germany, since previous deals in the country were made through joint ventures.

PFA won the race for the portfolio after competing with several other companies that were unable to top its offer. The Danish pension fund started showing interest in the portfolio in April and the deal was finalised in the last four weeks.

PFA has appointed Domicil Real Estate Group as its exclusive asset and portfolio manager for Germany.

‘The properties are primarily located in attractive and very attractive locations in sought-after residential neighbourhoods. Century also offers substantial potential for rental growth,’ commented Khaled Kaissar, founder and managing partner of the Domicil Real Estate Group.

More than half of the portfolio’s rental income is generated in Munich and Berlin, Domicil said.

Early exit for Industria Wohnen 
The portfolio was part of Industria Wohnen’s first real estate special fund dubbed ‘Wohnen Deutschland’, which launched for institutional investors in 2010 with a target term of 10 years.

Klaus Niewöhner-Pape, Industria Wohnen’s managing director, said: ‘Since the fund was launched, we have consistently geared the portfolio towards economically thriving conurbations with strong growth potential.’

‘On behalf of our investors, we are now taking advantage of the extraordinarily positive market developments of recent years and have decided to embrace this early exit opportunity,’ he added.

PFA was advised throughout the transaction by Gorissen Federspiel and auditing firm KPMG. Jebens Mensching and JLL also acted as advisors. Arcadis Germany provided technical services support.

Industria Wohnen was advised throughout the transaction by Heussen Rechtsanwälte, Munich. CBRE and BNP Paribas Real Estate managed the transaction process on behalf of the vendor.


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