Tristan ventures to secondary German market

The London-based firm has invested in a ‘distressed’ shopping centre in the secondary location of Halle in eastern Germany for €31m.

Tristan Capital Partners today claimed ‘first mover’ advantage as it trumpeted a shopping centre acquisition in Halle, eastern Germany.

London-based Tristan, which is currently investing a core-plus real estate fund called Curzon Capital Partners III, said few were venturing into Germany’s secondary markets. Nevertheless, the firm has paid €31 million for ‘distressed’ Neustadt Centrum Halle shopping centre in the German state of Saxony-Anhalt. It has bought it from an Australian listed real estate trust, which is pulling out of the European market.

Investors contemplating going to secondary locations in Germany or secondary locations in primary cities was a theme that emerged during the PERE German Roundtable in September. Christoph Schumacher, managing director at Union Investment, the German bank-backed asset manager, said overseas interest in prime assets had led to prices being “very competetive”. MGPA’s European chief executive Laurent Luccioni added the truth was that Germany had become a “much more core-plus, value-added market than a truly opportunistic one.”

In a statement on today's announced deal, Cameron Spry, head of investments at Tristan said: “Germany is firmly in the sights of most pan-European property investors, but few are yet venturing into the country’s secondary markets. We think there is real value to be found by taking the first mover initiative and through asset management.” He added: “Despite having sustainable rental levels and high quality shop mix comprising national retails, Neustadt Centrum is being sold at a competitive price as a distressed asset.”

The centre stretches to 330,454 square feet of leasing area and was built in 2000. It is anchored by an array of home-spun retailers such as Aldi, Modehaus Fisher, Deichmann and Medimax in an affluent and densely populated area

Pamera Asset Management, which has five offices in Germany, has been selected to act as the local operating partner and will co-invest in the deal.

Tristan was started by chief executive Ric Lewis in 2009, and closed Curzon Capital Partners III on €420 million of commitments in February this year.

A total of 13 institutional investors have invested in the vehicle from countries such as Germany, the Netherlands, Finland, the UK, the US and Singapore. Of the 13, eight are thought to be existing investors in funds managed by Tristan (whose forerunner is Curzon Capital Partner), and five are new.