Germany-focussed real estate investment company Aggregate Holdings said it has completed the acquisition of a real estate portfolio consisting of 10 development projects spread across Berlin, Düsseldorf and Frankfurt.
The portfolio’s focus is largely mixed-use urban developments incorporating office (53%), residential (32%), plus commercial, retail and other (15%).
Aggregate plans to construct the majority of the Berlin assets in its Build & Hold division and to progress development and then exit the other assets in the portfolio over time.
The acquired portfolio’s gross development value (GDV) stands at approximately EUR 4.5 billion, with GDV of over EUR 2.5 billion to be retained in Build & Hold, said the company.
“This was a great opportunity to acquire high quality, well located real estate assets in Berlin, Düsseldorf and Frankfurt. The entire portfolio was acquired at an attractive price, again demonstrating Aggregate’s ability to undertake complex off-market transactions and deliver well-priced yield-to-cost assets. Post completion of Aggregate’s increased Build & Hold portfolio, the combined rental income from the division is targeted to be c. EUR 225 million,” said Benjamin Lee, Chief Financial Officer and John Nacos, Chief Investment Officer at Aggregate Holdings.
The combined gross construction area (GCA) of the portfolio is c. 1,200,000 sqm across the ten mixed-use developments.
The residual value of the portfolio as at 31 December 2020 was EUR 1.3 billion on a 100% basis, resulting in a Loan-to-Value for the portfolio post-acquisition of around 50%. The company has acquired an approximately 85% interest in the projects.
The key Berlin projects are located close to Berlin Brandenburg airport and in the south-east residential area of Treptow-Köpenick. Planned construction for the Berlin-based projects will commence in 2022, with first rental income expected in 2024, following pre-letting in parallel with construction.
The retained Berlin assets will be a significant addition to the Build & Hold division, with an expected increase of c. EUR 100 million of net rental income run-rate from the end 2025 onwards, on the basis of a combined additional GCA of approximately 675,000 sqm