KGAL Group, the German investment and asset manager, carried out €1.5 bn of European real estate transactions and closed almost 107,000 m2 of new leases last year.
Describing 2017 as a record year, André Zücker, managing director for real estate at KGAL: 'In a challenging market environment and amid fierce competition, our real estate business performance was once again top class. Together with our investors, we continued to implement successful international real estate strategies.'
KGAL's investment portfolio in Germany increased through the acquisition of several office and retail properties, in Munich and the wider areas of Nuremberg and Stuttgart. Outside Germany, there were large-volume transactions in Budapest, Paris, Vienna, and Wiener Neustadt.
These transactions contributed to a total of over €730 mln of acquisitions for the real estate business. At the same time, divestments and changes of ownership of a further €790 mln were completed, resulting in an accumulated transaction volume of over €1.5 bn in 2017.
Although the record figure achieved in 2016 (€2.1 bn due to one-off special items) was not reached, the 20-17 volume– from transactions inside and outside Germany – is a positive sign for future growth, Zücker said. KGAL's real estate portfolio at end-December 2017 had a value of €6.9 bn.
KGAL once again exceeded the previous year’s record in closing new leases, letting 106,800 m2 of space in 2017. This has passed the 100,000 m2 mark for the first time and represents an increase of 8% on 2016 (98,900 m2).
Around 83% of new 2017 leases, 88,500 m2, was attributable to commercial floor space outside Germany, predominantly in Austria and Hungary. A total of around 18,300 m2 came from a high number of smaller rental transactions in Germany. The total floor area for assets under management now comprises over 1.35 million m2. Due to ongoing successful asset management, the average tenancy rate in KGAL’s real estate is now almost identical inside and outside Germany, at 98.5%.
The KGAL Group has €22.7 bn of assets under management. Its investments focus on long-term capital investments for institutional investors in the real estate, infrastructure and aviation asset classes. The group, founded 50 years ago, operates across Europe and has its registered office in Grünwald near Munich.
Image: André Zücker, managing director for real estate at KGAL
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2017 European real estate transaction volumes, is published in May 2018.