SEB Asset Management has bought the DaimlerCity property in Berlin for its ImmoInvest open-ended property fund.
No financial details were disclosed, but sources say that the German fund manager paid Daimler around €1.4bn for the 19 assets, reflecting a net initial yield of between 4.2% and 4.4%. SEB paid cash for the shares in the property, but the fund manager is expected to refinance at a later stage.
The deal underlines the strong position of Germany’s open-ended funds. Last year, they raised billions of euros from retail investors and from the sale of large domestic portfolios.
The 285,000 m2 Berlin prime asset, also known as Quartier Potsdamer Platz, consists of 42% office space, 22% retail space and the remainder residential, leisure and hotel space. Daimler is the main occupant. The average remaining lease length is 6.1 years, said SEB.
The fund manager came late to the race to buy the property. Initially, SEB was asked by RFR Holdings to make a joint bid, but SEB then decided to go it alone. RFR Holdings had also approached other investors. One investor, who declined to be named, said RFR wanted to pay €1.3bn, with 70% gearing financed by five-year swap rates of 4.3%. That would have resulted in a shortfall after debt servicing for the first five years after purchase.
RFR Holdings withdrew, leaving SEB to compete with Saudi Arabian investor Al Habtoor and financier George Soros’ property fund, Appelas Bauwert. Spanish property company Metrovacesa also put in a bid but it was deemed insufficient, said sources.
SEB was advised by CB Richard Ellis and URS Deutschland as well as Freshfields Bruckhaus Deringer.
