US developer-investor Hines has completed the sale of Stuttgarter Tor, an office asset in Stuttgart, Germany, on behalf of the Hines European Value Fund (HEVF).
The 14,822 m2 office complex has been bought by investment management company Arminius, acting on behalf of German institutional investors, for an undisclosed price, after a competitive sales process managed by Colliers International. The deal was signed on Tuesday this week.
Hines acquired Stuttgarter Tor in December 2017, as the first investment made by HEVF, the first in the Hines flagship series of European core plus/value add strategy funds. The asset is being sold following a two-year asset management programme during which has significantly outperformed the fund’s business plan.
Located in a prime location in the Feuerbach office submarket of the city, Stuttgarter Tor comprises three buildings fully leased to a strong tenant base including Robert Bosch GmbH and law firm Menold Bezler. Hines secured planning consent for redevelopment of a fourth smaller, obsolete building in the complex, which was sold separately to an owner occupier advised by Immoraum in August 2019, and will proceed to develop a new headquarters premises.
Emanuel Coskun, managing director, Hines Germany, said: ‘Stuttgart is an important location for Hines in Germany, since we opened our office with a team here in 2008. Our knowledge of the local market was certainly instrumental in securing this asset and helped us execute the Fund’s asset management strategy which has proven so successful. We remain committed long-term investors across Stuttgart with multiple investments across the City including Kronzprinzbau 1 & 2, Caleido and the Karlshoehe Quartier.’
HEVF has successfully constructed a portfolio of 9 investments in Germany, the UK, Denmark, Spain, Italy and Poland within less than 2 years of closing its first acquisition. The Fund is now effectively fully committed. HEVF accepted €721 mln of equity commitments from 16 institutional investors in closings from July 2017 to August 2018, exceeding the original fund target size by over 40%.
The success of HEVF paved the way for HEVF 2, which earlier this year announced its first closing, securing €637 mln of equity commitments from 13 institutional investors, and thereby exceeding 50% of the € 1.25 bn total fund-raising target immediately.
Subsequent equity closings are expected through 2020. With Hines co-investing 5% of the total equity commitments, the fund is expected to have total purchasing power approaching €3 bn after factoring in leverage.
HEVF 2 has already secured four acquisitions combining €350 mln of equity allocations to flagship assets in Munich, Madrid and London.