Hines fronts Korean investment in €320m Allianz HQ

The Houston-based real estate powerhouse is understood to be targeting a 7 percent return from the investment made on behalf of Seoul-based Vestas Investment Management. 

Hines has forward-funded the next Berlin headquarters of German insurance powerhouse Allianz on behalf of a Korean management firm, for a reported figure of as much as €320 million.

The Houston-based real estate giant has acquired the Allianz Campus Berlin, a three-asset complex in the Adlershof Technology Park, one of Berlin’s prominent tech hubs and home to around 1,000 companies and 16,000 employees.

The office complex comprises around 645,000 square feet of space and construction is expected to be completed in the last quarter of 2018. Allianz will be the main tenant and has signed a 34-year lease which will start in the first quarter of 2019, when the firm relocates from its current headquarters at the Treptowers complex, also in Berlin.

The transaction was made on behalf of Seoul-based Vestas Investment Management, which has in recent years focused on real estate investment trusts. The seller was Cologne-based property company Corpus Sireo Real Estate.

Neither party has disclosed the assets’ price but a figure of between €315 million and €320 million has been reported. The two firms were not available for comment on returns expectations, either targeted or achieved. However, PERE understands from one source familiar with the deal that Hines is targeting a “7 percent cash-on-cash dividend” for its investors.

Hines acted as investment manager for Vestas and will continue as the complex’s long-term asset manager, while Corpus Sireo will be responsible for the project’s construction.

“The dynamic development of Berlin will continue and further enhance the Adlershof Technology Park,” said Kai-Magnus Schulte, director of Hines Germany. “Allianz Campus Berlin will be the most modern and sustainable building in the best location of Berlin Adlershof. For our investor, the acquisition of Allianz Campus Berlin represents a strategic decision and we are pleased to welcome Allianz as a new tenant in 2019,” added Schulte.

Lars Huber, chief executive of Hines Europe, said the transaction represented a long-term investment in a core market where the firm continued to see demand. He added Hines was actively seeking further investment opportunities in Germany.

Hines has considerable experience with the development and management of corporate headquarters in Germany, having developed the bases of DZ Bank in Berlin; O2 in Munich; and Hessische Landesbank in Frankfurt.

For the transaction, Hines was advised by Clifford Chance, while Corpus Sireo was instructed by Latham & Watkins. The debt financing was provided by Berlin Hyp, the Berlin-based commercial real estate financing services firm, though details have not been disclosed.