10 Sep 2014

MStar Europe Acquires €259m of Light Industrial Real Estate in Continental Europe

10th September 2014 – MStar Europe, the multi-let industrial property joint venture that M7 Real Estate formed with a controlled affiliate of Starwood Capital Group, has agreed to acquire 613,000 sq m of light industrial property located mostly in France, Germany and the Netherlands for €258.7 million. The acquisitions take MStar Europe past the halfway stage in its investment programme.

The joint venture has completed the purchase or exchanged contracts to acquire 55 properties in five Western European countries through portfolio transactions and a successful buy-out offer for the listed Tamar European Industrial Fund.

Adam Shah, Senior Vice President, Starwood Capital said, “These transactions are a continuation of our successful platform in the United Kingdom in acquiring light industrial real estate. These assets have strong existing cash flows in place and we expect to drive additional value to the portfolio through our shared expertise in managing these assets.”

The partners established MStar Europe in April 2014, targeting a €500 million portfolio of assets to be overseen by London-based M7 Real Estate, the specialist investor and asset manager of European light industrial properties. MStar Europe is Starwood’s second joint venture with M7 Real Estate after MStar, the UK-focused vehicle that has acquired 27 properties with a value of £70 million since its launch in June 2013.

Richard Croft, M7 Real Estate’s Chief Executive, said: “We set up MStar Europe to seize the opportunities that we identified in Continental Europe to assemble a portfolio of high-yielding multi-let assets, some of which require active and creative management. The speed with which we have deployed capital validates that strategy. We continue to see Germany as a particularly attractive market for our value-add or opportunistic approach to investment.”

The acquisitions by MStar Europe include:

• A public offer for Tamar European Industrial Fund (TEIF) that was accepted by 96.4% of shareholders by the August 4th deadline, allowing the compulsory purchase of the remaining shares and the delisting of the company from the London Stock Exchange next month. The offer for TEIF valued the portfolio of 36 properties in Belgium, France, Germany, the Netherlands and Sweden at approximately €130 million.

• Completed the acquisition of 10 warehouses in the Netherlands from Rockspring for €71 million. The properties are located in the Randstad region encompassing the largest Dutch cities and comprise a total of 153,000 sq m of space.

• Agreed the purchase of five light industrial properties in Germany from funds advised by Valad Europe for €44.7 million.