Bayerische Versorgungskammer (BVK), Germany’s biggest public pension fund, and Frankfurt-based asset manager Universal-Investment have acquired Liffey Valley Shopping Centre for a reported figure of €630 million.
Liffey Valley is one of Ireland’s largest shopping centers with more than 705,000 square feet of retail space, comprising over 100 shops, restaurants and a multiplex cinema, with an additional 3,500 parking spaces.
The transaction will also see BVK and Universal-Investments buy a 7-hectare plot of development land, which was granted planning permission in August, adjacent to the retail site. This will add a further 205,000 square feet of retail space as well as a new civic plaza and a 2,500-seat Olympic-sized indoor ice rink.
The seller was a consortium comprising HSBC Alternative Investments Limited (HAIL), UK property firm Grosvenor Britain & Ireland and Texas-based commercial real estate firm Hines. Hines will continue to act as asset and development managers for the center.
In 2014, Hines and HSBC acquired a 73 percent stake in Liffey Valley for around €250 million, which valued the shopping center at around €340 million. Until the most recent sale, Grosvenor Britain & Ireland had been involved in the shopping center since it was built in 1998.
This month’s transaction is expected to be the first of a number of deals between BVK and Universal-Investments over the coming 12 months. In October, the pension scheme awarded the Frankfurt-based firm a €3.6 billion mandate to invest in Nordics, German and Dutch residential, as well as real estate in Asia and Australia across all sectors.
The deal also means four of Ireland’s five largest shopping centers have been purchased by institutional investor capital since March, for a total of around €2.75 billion. In March, German fund manager Deka Immobilien bought Whitewater Shopping Centre in Co Kildare, west of Dublin, for €180 million; in May, US private equity firm Blackstone acquired the Blanchardstown Shopping Centre, in Dublin, for €940 million; and in July German insurer Allianz purchased Ireland’s largest shopping mall, Dundrum Town Centre, also in the Irish capital, for more than €1 billion.
“Retail properties and offices are the most favored real estate sectors in German institutional investors’ portfolios and provide good diversification and deliver steady returns,” said Alexander Tannenbaum, managing director at Universal-Investments.
Commercial real estate firm HWBC, which acted as advisers to the purchasers on the transaction, said Liffey Valley had attracted “considerable” international interest.
“Liffey Valley is a landmark asset, which in recent years has offered considerable upside potential thanks to an improving Irish commercial real estate sector, strong tenant demand and significant development opportunities,” said Brian Moran, senior managing director of Hines Ireland.
BVK has inked a number of specialized mandates since introducing a new strategy last year. In 2015, the pension fund awarded mandates to CBRE Global Investors, LaSalle Investment Management and UBS Global Asset Management. While so far in 2016, including the €3.6 billion Universal-Investments deal, the pension fund has inked three further mandates worth a total of €5.7 billion.
For the Liffey Valley deal, HWBC acted as advisers to BVK and Universal Investment, while property services firm Eastdil Secured advised the sellers.
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