Evans Randall closes €285m German office and retail transaction
Prime Stuttgart mixed use asset is a secondary transaction with Italian JV partners Poste Vita and Enpam alongside a new financing package.
Private equity real estate company Evans Randall Investors has closed on a secondary transaction on its mixed use asset Königsbau Passagen in Stuttgart for a total of €285m with joint venture partners Italian insurance group Poste Vita, and Enpam, the Italian pension fund for doctors and dentists, which has invested through Italian real estate investment manager Antirion SGR. The transaction, which reflects a yield of circa 4% on the asset, has seen Poste Vita and Enpam acquire the existing equity contemporaneous with the closing of a new financing package within a new German regulated fund vehicle. Evans Randall said the financing took advantage of the current low interest rate environment which saw it secure a "very competitive 10 year 50% LTV loan facility with Allianz". Evans Randall Investors will continue to provide asset management and advisory services and ECE will retain responsibility for centre management. Königsbau Passagen is a prime retail and office complex in central Stuttgart. It was purchased by Evans Randall Investors shortly after it was opened in 2006. It has since become one of Stuttgart’s leading shopping destinations, with a broad mix of tenants. The asset, which provides 26,000 sq m of retail and 18,000 sq m of offices, has undergone intensive asset management during Evans Randall Investors’ ownership, leading to "substantial increases in the annual rent roll and footfall" it said.
A €10m redevelopment of the first and second floors in 2013, created a new food lounge and introduced a specialist supermarket. Evans Randall said this has helped sales per sq m to lift to €5,000 compared to the national average of €3,500. The centre is fully let and Evans Randall said the offices are achieving the highest per sq m rents on record in Stuttgart. Kent Gardner, CEO of Evans Randall Investors, said: “Königsbau Passagen is a highly recognisable example of our ability to creatively reconfigure, redevelop and manage large, complex schemes to unlock and generate additional value. "This transaction has secured a substantial equity investment from two of Italy’s leading real estate investors and provided an opportunity for existing investors to reallocate their capital. "Evans Randall Investors will continue to work with our new partners to grow both occupier appeal and Königsbau Passagen’s reputation as a landmark commercial property and an extremely popular destination for tourists and locals alike.” Evans Randall Investors was advised by boutique real estate capital advisory group Real Asset Partners, which provided capital placement services.
Publication: CoStar (Paul Norman)
Date: 03 September 2019