Dutch pension fund manager PPGM and London-based private equity real estate firm Rockspring Property Investment Managers have teamed up to invest in Berlin offices to take advantage of the city’s burgeoning tech scene.
The pair have established a €250 million joint venture which will look to acquire offices housing media, telecommunications and technology tenants against a value-add strategy.
Rockspring’s Berlin office will source and asset manage the portfolio for the new joint venture which has already made its first acquisition, a former factory site in Berlin’s tech hotspot Kreuzberg.
Ritterstrasse 12-14 is a seven-story building fully let to a range of tenants on short term leases at relatively low rents. The property includes an undeveloped site with a building permit for more than 59,000 square feet of lettable space, where construction is scheduled to start at the end of 2017.
The pair expect to close another four to six transactions over the next 18 months, according to a company statement.
“The economical and demographical developments are making Berlin a very attractive location for young and highly educated people and fast-growing tech companies,” said Thijs van Gelder, director at PGGM Private Real Estate. “This results in strong demand for modern office space. As the supply is limited this partnership will focus on creating additional space and increase the sustainable performance of the assets and take care of the wellbeing of its tenants.’’
Sustainability has become a focal point for PGGM, which set an ambitious target for its €11 billion real estate portfolio in 2015. The property portfolio must contribute to a reduction of 50 percent of the CO2 footprint of the overall portfolio PGGM is managing on behalf of its client PFZW, a Dutch pension fund for the health care sector, by 2020.
Guido Verhoef, head of PGGM Private Real Estate said: “The investment strategy is part of our broader European office strategy. We want to combine attractive financial returns while making office buildings which are located in upcoming locations more energy efficient.”
PGGM had total assets under management of €205.8 billion as of December 31, 2016.