5 July 2017
Reporter: Theo Andrew

PGGM and Rockspring JV targets Berlin with €250 million

Rockspring and PGGM Private Real Estate have launched a joint venture targeting value-add offices in technology hubs in Berlin, with initial funding of €250 million.

The joint venture is responding to the growing demand from fast growing technology companies within media, IT and telecommunications in the Kreuzberg, Mitte, Friedrichshain and Mediaspree districts.

Targeting sustainable investments, the partnership will focus on achieving a low CO2 footprint, with PGGM committing to a 50 percent reduction of its CO2 footprint across its global portfolio.

According to Guido Verhoef, head of PGGM, the joint venture will close on four to six transactions over the next 18 months, focusing on “making office buildings which are located in upcoming locations more energy efficient”.

The group has seeded the joint venture with an acquisition of Ritterstrasse 12-14, a 9,270-square metre former factory site in Kreuzberg district of Berlin.

The property, currently fully let on a number of short term leases, has an additional 5,520-square metre site with development of a new office building expected to start towards the end of 2017.

Verhof said: “The chosen partnership model offers the opportunity to adequately time the investment decision, which is crucial to successfully invest in a cyclical sector like offices.’’

Rockspring and PGGM are building on a 20 year partnership which has invested €950 million in German real estate.

According to PGGM, the joint venture is part of its strategy to set up prominent partnerships with real estate managers with specific knowledge in local markets in Europe, America, Asia and Australia.

Thijs van Gelder, director of PGGM, said: “We are extremely pleased with this next step in our partnership with Rockspring. The economical and demographical developments are making Berlin a very attractive location for young and highly educated people and fast growing tech companies.”

“This results in strong demand for modern office space. As the supply is limited this partnership will focus on creating additional space and increase the sustainable performance of the assets and take care of the wellbeing of its tenants.’’

Stuart Reid, partner at Rockspring in charge of Germany, said: “Berlin has really moved on from 2004 when the town mayor described the city as ‘poor but sexy’. The capital is now coming of age and offers huge future potential based off a relatively low capital value base. There is no other European city with such strong net office absorption and population, job and business growth.”

“Berlin is the first truly international German city and is destined to be the winner as new and established businesses battle it out across Europe in the ‘search for and retention of talent’.” The portfolio will be sourced and managed from Rockspring’s Berlin office.

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