GE Pays $301M for 31 German Assets

BERLIN-GE Real Estate has secured a large portfolio scattered throughout Germany, paying $301 million for 31 properties. The assemblage of more than 1.8 million sf, which covers a diverse mix of product types, is being obtained from a consortium of institutional investors who pooled the assets in a successful campaign to divest them efficiently.

“We are glad that we were able to acquire this portfolio and thereby strengthen our presence in Germany, especially in the eastern part of the country,” says Rainer Thaler, director of GE’s real estate operations in the country. The City of Berlin and the states of Saxony and Thuringen are among the top destinations included in the portfolio.

Many of the secondary East German markets where GE will now have a presence are those the firm has been targeting in recent months, explains Thaler, with the portfolio approach affording the opportunity to enter multiple regions simultaneously. “Leipzig, Halle, Dresden, Jena and Erfurt are currently enjoying a continuous upswing, and the forecast points to above-average economic growth,” Thaler says. Several major Western German cities are also featured in the package, among them Dusseldorf, Hamburg and Munich. The portfolio is weighted toward office product, representing 70% of the square footage. Another 20% is retail product, and the remaining 10% is multifamily.

GE is already well-represented across Germany, having invested billions of dollars in the past decade. The pace has remained brisk there in 2007, with the firm spending $550 million at the outset to buy a specialty fund owning 12 office buildings and 1.5 million sf in areas including Bonn, Frankfurt, Karlsruhe and Munich. Following that deal–GE’s first in a regulated German fund product–the company paid $45 million for 15 stores leased to a top international furniture retailer. More recently, GE acquired five mixed-use properties in Dusseldorf, a 200,000-sf package that brought its investment in that market alone to $545 million.

In the latest transaction, GE was advised by P+P Pollath + Partners. Jones Lang LaSalle and Taylor Wessing handled negotiations for the sellers. The portfolio’s occupancy at time of sale and rental income levels were not divulged.