Kingsett Capital has sold Petroleum Plaza in Edmonton, Canada, to German open-ended fund DEGI International for around €80 million ($125 million).
The sale has been made out of its Real Estate Growth fund I, which acquired the office complex in January 2005. The vehicle closed in October 2002 on $220 million and was fully committed by February 2005. The firm has since been divesting the portfolio and has continued the sales program into 2008. At the end of June it also sold an industrial building in Montreal while in March it sold an office and industrial asset in Toronto.
Petroleum Plaza is a 1970s office complex of around 30,000 square meters which has been regularly improved.The purchaser, DEGI International, said in a statement that Edmonton boasted the strongest economic growth of all Canadian cities, put at 4.2 percent. That growth is thanks, in part, to its ties to the energy industry. Alberta, the region of Edmonton where Petroleum Plaza is located, boasts extensive oil sand deposits.The building is occupied by the provincial government of Alberta on a lease that expires in 2020.
DEGI is a German fund manager that was acquired by Stockholm-based Aberdeen Asset Management earlier this year. Its global property fund arm has acquired two other properties in Canada for €414 million as part of its growing international investment program. The other Canadian assets are in Calgary and Ottawa.
German open ended funds in general are becoming more acquisitive internationally after a few years in the doldrums. They are in general enjoying net inflows of capital from ordinary German investors after a series of scandals involving valuations and fraud rocked the sector.