M7 and Starwood Joint Venture Acquires Nine German Light Industrial Properties for €57.6 million

10th November 2014 – MStar Europe, the multi-let property joint venture between M7 Real Estate and a controlled affiliate of Starwood Capital Group, has invested €57.6 million to acquire nine German light industrial warehouses from various vendors.

Alyssa Huse, Managing Director of M7 Real Estate Germany GmbH, said: “The lack of development during the financial crisis means there is great potential for these well-located assets through hands-on management by our highly experienced team. We are actively looking for more of these high-yielding investments in Germany.”

The purchases add 147,000 sq.m. of lettable space to MStar Europe’s portfolio of assets, which has expanded significantly in the past two months through acquisitions in the Netherlands and a successful buy-out of the listed Tamar European Industrial Fund. M7 Real Estate advised on the purchases and will manage the assets. The investments in Germany are:

• The €44.7 million purchase of a five-property portfolio from funds managed by Valad. The properties have a total lettable area of around 100,000 sq.m. and are occupied by 55 tenants. The purchase price equates to less than €450 per sq.m. The properties are situated in the vicinities of Frankfurt, Cologne, Hamburg and Dusseldorf.

• U.S. investment company Castlelake sold three portfolio warehouses located in Dortmund, Herne and Kassel to the joint venture. The €7.05 million purchase price equates to just over €210 per sq.m. The portfolio has been acquired with a number of vacant units, which provides the opportunity for significant rental income growth through asset management initiatives.

• The joint venture has also acquired a 14,200 sq.m. property in Dormagen from Archon Group for €5.8 million. The property is 75% occupied and currently has 10 tenants, the largest of which is Arlogis.

MStar Europe is M7 Real Estate and Starwood’s second joint venture after MStar, the U.K.-focused vehicle the partners formed in June 2013. Established in April 2014, MStar Europe aims to invest up to €500 million in high-yielding multi-let light industrial property in Continental Europe.