Optimum Asset Management, the boutique real estate investment manager, has announced the acquisition of a 15,000 sqm office asset in Berlin-Pankow. The deal is the first acquisition from Optimum’s German Real Estate Fund IV (GREF IV), which has a strategy to invest in a diversified portfolio of residential and commercial properties.
Located in Weißensee, Berlin, within close proximity to the Prenzlauer Berg residential district and Alexanderplatz public square, the five-storey commercial asset offers significant value creation potential as a result of increasing demand for office space in Berlin, resulting in low office vacancy of ~2%. Within close distance to tramway networks, the site will offer an appealing option for tenants.
The acquisition is the first investment from Optimum’s GREF IV, the fourth iteration in a series of strong performing German real estate funds pursuing properties in the range of €10-40 million. Targeting €300 million, the fund seeks to add value by optimising mispriced and mismanaged residential and commercial assets near major infrastructure and employment hubs. The primary target area is Berlin, with selected investments in high-growth, supply-constrained cities such as Hamburg, Dresden, Leipzig, Cologne and Düsseldorf.
Alberto Matta, Chairman and Founder at Optimum Asset Management, said: “This first acquisition speaks to the characteristics of the portfolio we seek to build with our fourth German Real Estate Fund. Through deep local networks and knowledge in Berlin and other major German cities, we are well placed to further consolidate our strong track record of identifying well-located, high-quality, and mismanaged assets and invest with agility below the radar of larger managers.
“Germany’s real estate market continues to offer strong opportunities to create value. With the lowest office vacancy among the big seven German cities, Berlin remains one of the most sought-after locations in Europe for office investment, driven by a fast-growing economy, positive demographics and employment growth, and a robust tech and start-up community.”
With the support of its 12-strong Berlin team, which includes nine German asset managers headed by André Gretsch, Optimum has completed over €1.5 billion of real estate transactions in the region since 2006, establishing tailored asset management initiatives to improve cash flows and create value by timely exits.
The firm’s track record includes Property I, the Berlin-focused real estate fund, which was fully realised in 2014, achieving an IRR of 19% and a 2.3x MOIC. Optimum’s Property II (2011 vintage) and Property III (2014 vintage) are centred on Berlin and Potsdam, with additional properties in Dresden forming part of the Property III portfolio. Property II and Property III currently have a total return of around 290% and 170% since inception, respectively. Realised assets have achieved an IRR ranging from mid-teen to 30+%.