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Deutsche buys Warsaw office for €190m

Aberdeen Asset Management's sale of the Metropolitan in Warsaw comes after ‘strong’ performance during its ownership.

Deutsche Asset & Wealth Management (AWM) has bought the Metropolitan office and retail building in Warsaw, Poland, for nearly €190 million, taking its gross assets under management in the country to €1 billion. Deutsche AWM said it acquired the 361,700-square-foot building on behalf of one of its German funds for institutional investors, but it did not disclose which one. 

Gianluca Muzzi, head of real estate for Europe ex-Germany at Deutsche AWM, said: “Our continued strength in Poland demonstrates our commitment to the country and the depth of the Warsaw and global teams.” 

The Metropolitan is located at Pilsudski Square 1 in Warsaw, widely considered the administrative, political and economic capital of Poland as well as the business hub of Central and Eastern Europe. It was completed in 2003 by Hines, the US developer and investment manager, which held it for a period of three years before selling it onto DEGI Deutsche Gesellschaft für Immobilienfonds for €178 million near the top of the market. One year later, in 2007, Aberdeen took over DEGI, inheriting the Metropolitan in the process. The sale by Aberdeen reflects a book value profit of €12 million. 

Also in 2007, DEGI acquired another large property in Warsaw, the Focus Filtrowa, for €122 million. At the time, the firm said it was investing in anticipation of rising rental values in Warsaw and noted that Poland’s GDP was set to rise 4.8 percent in 2007. In fact, Poland surpassed that by growing 6.8 percent in 2007 and 5.1 percent in 2008 before tailing off to 1.8 percent in 2009. GDP grew again to 3.9 percent in 2010 and 4.5 percent in 2011 before falling to 1.9 percent in 2012 and 1.6 percent in 2013. 

Bernd Bechheim, head of asset management and transactions for Continental Europe at Aberdeen, said: “Metropolitan is a stunning building that has performed strongly over the holding period. The completed transaction proves again the quality of our portfolios and forms a major step in restructuring our business towards new mandates.”