JER Partners seals acquisitions in Italy and Switzerland

The private equity real estate firm has made a €39 million investment in the Italian retail sector and acquired a 50 percent interest in a Swiss hospitality company, its first deal in Switzerland.

JER Partners, the private equity real estate arm of the JE Robert Companies, has made two investments in Europe as it continues to expand its presence across the Continent.

In Italy, JER recently acquired a portfolio of five retail showrooms from Mete SpA, one of the country’s largest household furniture retailers, in a 12-year sale-leaseback transaction. The purchase price for the portfolio, which comprises 30,000 square meters, was €39 million ($51 million). In a statement, the firm noted that it had also agreed in principle to acquire additional retail assets currently held by Mete.

“The immaturity of the retail warehousing market in Italy means that portfolio transactions are rare and much sought after,” Malcolm Le May, president of JER Europe, said in a statement.

The day before the announcement of the Mete transaction, JER announced its first investment in Switzerland, the acquisition of a 50 percent interest in the Manotel hotel chain. JER acquired the stake from Finial Holding, which will continue to own the remaining 50 percent of the business, in a transaction that values the hospitality company at more than CHF 200 million ($165 million; €125 million). Manotel owns six hotels in central Geneva, or approximately 10 percent of the city’s total hotel market, according to a statement released by JER.

Switzerland is a notoriously difficult market for foreign investors to enter due to a significant amount of domestic capital as well as a burdensome tax and planning regime. Nevertheless, interest in the country is begging to pick up as the Swiss economy shows signs of growth. Foreign supermarket chains such as Lidl, Aldi and Carrefour are beginning to make inroads and earlier this year, Pramerica, the European real estate investment arm of Prudential, closed its acquisition of Swiss property company A&A Liegenschaften Schweiz. For its part, JER plans to make up to CHF 175 million in additional acquisitions in the Swiss hospitality market.

“We believe that [Manotel] is an extremely valuable proposition which can be developed into a national chain in Switzerland,” Le May said in a statement.

JER Partners has raised three US focused private equity real estate funds and two European vehicles. It closed its latest European fund, JER Europe Fund II, in January 2004 on €123 million. The firm is currently raising its third European vehicle, which has a reported target of €300 million.