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Ares Management, a US fund manager based in Los Angeles has entered an exclusivity period to purchase a European office portfolio from the German fund manager IVG Immobilien. The German fund manager currently has around €11 billion (£7.8 billion) of assets under management. Ares has 15 offices in the United States, Europe and Asia, and has been in business since 1997.
The price of the portfolio, IVG Institutional Funds’ Project Traction portfolio, is around £357 million (nearly €500 million) and it contains properties across Europe. The yield at this price is around 6.5%.
The assets of the portfolio comprise 30 offices, of which around 40% are in France, 35% in the Netherlands, and the remaining approximate 25% across Spain, Finland, the UK and Belgium. The portfolio’s vacancy rate of around 30% will allow Ares to increase the value of the portfolio.
This deal, added to several pan-European portfolio deals this year, marks another point in the increasing attractiveness of such assets, involving multi-jurisdictional properties, there having been virtually no movement in the sector for six years.
This is the second IVG portfolio purchased by Ares this year, having bought the first in February for €100 million (over £70 million). That comprised eight assets, again across the Netherlands but also including Germany, the UK, Poland and Sweden. Retail as well as offices were included, with a combined space of 450,000 square metres.
Other deals in the sector include the purchase of Project Aqua, Union Investment’s pan-European office portfolio by French asset manager Amundi Real Estate for €1.1 billion (around £80 million).
This news was brought to you by Morgan Pryce, a specialist tenant acquisition agent with offices in Oxford Circus and the City. Morgan Pryce specialises in search, negotiation and project management and works exclusively for tenants.