The DIC Group is one of the leading investors in the German market for commercial real estate

Press Release

GEG German Estate Group AG Launches its Market Entry with Two Property approximately EUR 160 Million

Frankfurt, 28.07.2015

TWO REAL PROPERTY ASSET IN MUNICH:

• Landmark core property: “Sapporobogen”
• Opportunistic investment: “Neue Pasinger Mitte”

GEG completed its first major transactions by acquiring two big-ticket real property assets in Munich: one being the property “Sapporobogen” acquired for its “landmark core” business line, the other being the “Neue Pasinger Mitte” project with its attractive development potential that was acquired for the business line “opportunistic investments.” The investment volume totals approximately EUR 160 million.

LANDMARK CORE PROPERTY: "SAPPOROBOGEN"
With the “Sapporobogen” office building, GEG acquired a high-end commercial property from Württembergische Lebensversicherung AG, a Stuttgart-based insurance company: The office complex with a gross lettable area of around 27,500 sqm on 11 floors is located north-west of downtown Munich, right across from the Olympic Park. The building is almost fully let to well-known tenants of first-rate credit worthiness. The average remaining lease term is around 6 years.

The investment volume of the complex of buildings comes to approximately EUR 90 million. The estate agency brokering the transaction was CBRE. Legal counsel to the buyer side was provided by GSK Stockmann + Kollegen.

The building cluster was comprehensively modernised in 2012, and meets the highest quality standards in terms of architecture, structural design, energy efficiency, and technical fit-out.

OPPORTUNISTIC INVESTMENT: "NEUE PASINGER MITTE"
The property development “Neue Pasinger Mitte” at Bäckerstrasse in the Munich City district Pasing includes a medical centre, a tower block and a retail building complex along with a vacant plot yet to be developed. A local development plan for the entire estate has already been finalised. The medical centre and the rental building complex are to be redeveloped and revitalised, while the retail building complex will be rebuilt. In addition to 80 new residential units, the development will create highly attractive new retail units directly across from the well-established “Pasing Arcaden” shopping centre whose catchment area extends successfully beyond the Munich city limits and in the immediate vicinity of the Pasing railway station. The construction work is scheduled to start in fall of 2016, and is expected to take around two years to complete. After construction and revitalisation will have been completed the usable floor space will be more than 11,000 sqm.

The property and the associated property development were sold by DIC Asset AG as the company intends to focus on the management of existing properties in the future. The investment volume of this acquisition comes to approximately EUR 70 million. The transaction is being financed by BayernLB. It was facilitated on the buyer side by McDermott Will & Emery.

Ulrich Höller, CEO GEG: “The two prestigious investment assets in Munich highlight the bandwidth of GEG's business model. They mark GEG's first touchdown on the German real estate market, and represent a consistent part of our ongoing and sustainable effort to build up our business in the coming years.”

ABOUT GEG:
Formed in early 2015 and having its registered office in Frankfurt am Main, GEG has positioned itself as one of Germany's leading investment and asset management platforms in the commercial real estate sector. GEG focuses on investments in the landmark core property segment, opportunistic investments, and property developments. The company commits both equity capital and third-party investor capital. GEG is jointly owned by KKR, one of the globally leading investors with commitments in diverse asset classes including private equity, energy, infrastructure, real estate and credit products, and by the Frankfurt-based Deutsche Immobilien Chancen-Group (DIC).

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