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Hines, Universal-Investment in €215m double purchase for BVK

The Houston-based real estate powerhouse and the Frankfurt-based asset manager have made a double purchase, in Paris and Manchester, on behalf of a €1.3bn high street mandate from BVK. 

Hines, the Houston-based real estate firm, and Universal-Investment, the Frankfurt-based asset manager, have acquired two mixed-use assets, in Manchester and Paris, for a combined price of €215 million on behalf of Bayerische Versorgungskammer (BVK), Germany’s largest public pension fund.

The first asset acquired by the partnership was Marche Saint Germain, a three-story mixed-use property in central Paris, for a reported €130m. The seller was thought to be Belgian real estate investment trust Banimmo.

Originally built in 1995, the building is located in the heart of Saint-Germain-des-Pres, which lies to the south of the Seine, near the Louvre. It comprises 68,000 square feet of retail and office space, with key tenants including Apple, Marks & Spencer, Nespresso and Uniqlo.

The second asset purchased on behalf of BVK was the Royal Exchange, Manchester, for around €85 million.

Located in the city center, the property comprises 120,000 square feet of office space and 100,000 square feet of retail space. It also includes the Royal Exchange Theatre, which was completed in 1976 and can seat up to 700. The retail and leisure spaces are home to a range of tenants including Molton Brown, Starbucks, Swarovski, L’Occitane and Hotel Chocolat.

The building was acquired from Trinistar Manchester, a joint venture between Starwood Capital Group and UK property firm Trinity Investment Management. Trinistar reportedly bought the property from M&G Real Estate in 2014 for approximately £45 million ($57 million; €53 million).

Speaking about the Marche Saint Germain transaction, Peter Epping, managing director at Hines Europe and fund manager of the BVK account said: “With its location in one of Paris’ most sought after and affluent neighborhoods, Marché Saint Germain is an ideal asset for acquisition. The quality and character of the building, coupled with its diverse income profile from leading retail brands, make this asset a compelling proposition for BVK.”

Referring to the Royal Exchange transaction, Epping added: “The Royal Exchange building is well positioned to benefit from the continuing positive development of the city’s retail and office core and represents a promising long-term investment for BVK’s high street retail strategy.”

The transactions are the fifth and sixth acquisitions by Hines and Universal-Investments for the BVK mandate, having been appointed in early 2016 to execute a €1.3 billion investment program targeting prime high-street retail property across Europe. Thus far asset have been acquired in Milan, Oslo and Glasgow.

With the completion of both deals, approximately 50 percent of the €1.3 billion portfolio has been committed.

Alexander Tannenbaum, managing director of Universal-Investment, said: “German institutional investors favor retail properties in their increasing real asset portfolios as they deliver steady returns and provide good diversification.”

So far this year, in addition to the €1.3 billion high street fund, BVK has handed out mandates backing real estate totalling more than €5.7 billion. This includes a separate €3.6bn deal with Universal-Investment to create European and Asian-Pacific real estate investment vehicles; a €400 million mandate to Patrizia Immobilien, the Augsburg-based real estate investment manager, to create a pan-European residential property portfolio; and a further €400 million deal with Finnish private equity fund CapMan to invest €400 million in Nordic residential markets.

For the Royal Exchange deal, Bilfinger GVA advised Hines, MMX while Commercial Properties acted for Starwood and Trinity IM. The adviser, on either side of the Paris transaction, was not disclosed.