Patrizia Immobilien, the German real estate company, and Oaktree Capaital Management have combined forces to buy a UK office and industrial business park for £245 million (€285 million; $376 million).
Winnersh Holdings, a joint venture vehicle formed by Patrizia and Oaktree, has purchased IQ Winnersh, a 1.27 million-square-foot park at junction 10 of the M4 motorway near the city of Reading to the west of London. The asset was sold by Segro, the London-based specialist owner and operator of warehousing, light industrial and data centers.
The park has a vacancy rate of 9.7 percent and an unexpired lease term of 8.3 years, but the new owners hope to improve upon that due to the “improving occupier sentiment currently being witnesses in the UK.” The pair hope to achieve this by letting up vacant space, re-gearing leases and financing the property soon after acquisition.
This is the fourth time Patrizia and Los Angeles-based Oaktree have invested together in the UK in the last four months. Rob Brook, who used to be the chief executive of London-based Tamar Capital, which was taken over by Patrizia in April this year, said the transaction met the JV’s strategy of buying quality assets in “attractive segments” of the market for value-added opportunities.
Patrizia currently employs 600 people with 90 percent of its €10 billion portfolio managed on behalf of third-parties, such as insurance companies, pension plans, sovereign wealth funds and savings banks. Among its deals was the capture of German-listed residential property company GBW earlier this month. GBW was sold by the Bavarian Landesbank for €882 million, handing Patrizia management of more than 32,000 residential and 300 commercial units exclusively located in Bavaria. The company won a similar auction last year when it bought a German portfolio for €1.44 billion from LBBW, another German residential property company.
In February this year, Patrizia announced how it was repositioning itself to expand even further. It said it would “roll out” a new organisational structure to keep pace with the increasing international reach of its business by becoming a “fully integrated real estate investment company.” To do that, it transferred six different operations into one company.
For its part, Oaktree currently is out raising Oaktree Real Estate Opportunities Fund VI, primarily concentrating on real estate-related distressed opportunities through investments in real estate-backed debt, companies, securities and other assets. Around a quarter of the fund is expected to be invested internationally, with the bulk deployed in the US.