EQT Real Estate, the London-based real estate arm of Nordic private equity giant EQT, has made its first acquisition in Germany with the $188 million purchase of an office park in Cologne.
The 1 million square foot asset, Technologiepark, is located near the city’s central business district and is comprised of seven separate office buildings, it also has around 2,800 parking spaces. The seller was German real estate firm Narat, which sold Technologiepark due to “insolvency issues”.
EQT said it was intending to focus on updating the physical structure of the building and improve the tenant experience in the park in order to re-gear the leases. The firm added that the acquisition placed it in prime position to take full advantage of the demand and supply imbalances across Cologne which, it said, was likely to experience substantial rental growth in the medium to near term.
“Technologiepark is a further example as to the breadth and depth EQT has in the European real estate market and the ability to successfully compete for sizeable deals at the highest level. This transaction highlights the variety of investments EQT is able to take on,” said Edouard Fernandez and Robert Rackind, partners and real estate co-heads at EQT.
The latest deal represents the third market activity for the giant private equity firm which launched its real estate business last year. Over the last year, the firm has been growing out its team, adding six executives to bring its real estate team up to 13.
Lennart Blecher, deputy managing partner at EQT, and head of EQT Real Assets, said: “This deal, in addition to the two Paris deals recently closed, shows EQT's ability to ramp up and integrate a successful real estate strategy into its market-leading platform.”
In August, EQT acquired Le Doublon, a €51 million office asset in Paris. The 320,000 square foot building is located on Avenue Dubonnet, in Courbevoie in Western Paris, which lies between the main financial center, La Defense, and the central business district.
While in July, the firm bought a €33 million office asset in Rue Lauriston, in the heart of the city’s central business district, close to the Arc de Triomphe. The deal was a joint venture with EQT’s local partner, Paris-based asset manager STAM Europe.
Also in July, PERE revealed that EQT had raised €200 million in capital commitments for its debut fund from a combination of European institutional investors as well as seeding from EQT Real Estate itself. The vehicle has a fundraising target of €500 million. The fund is thought to have a fund life of eight to 10 years and a target internal rate of return of 16 percent to 20 percent.
PERE also understands that the firm has its eyes fixed on other major German cities such as Munich, Berlin, Hamburg, Frankfurt and Dusseldorf.
Ashurst acted as legal advisor to EQT, while BNP Paribas Real Estate provided strategic advice.