News and Media

CHC Ltd land €160m German properties

By DONAL BUCKLEY

Irish wealth management company, Custom House Capital Limited (CHC), has purchased two German properties with a combined value of more than €160m. One of the properties, which costs €91m, is the Parkstadt Centre mixed development in Munich.

The other, the Maximilian Center, is a new shopping development which was acquired for €71.8m. Located at Woerth am Rhein, it is near the city of Karlsruhe in the state of Rhineland-Palatine. The development is 92pc let and generates a total rental income of about €4.3m per annum.

The Parkstadt property is located in the upmarket Grunwald district of Munich. To date CHC has raised over €28m of its €32.27m. equity target in a stand-alone fund for this property. The minimum investment in the Parkstadt fund is €100,000 and is due to close soon.

With a combined rent of €5.4m, its initial gross yield is estimated at 5.99pc.

Located near the Allianz Stadium which is home to soccer team Bayern Munich, it is en route from the new airport and 5km from Munich city centre.

It consists of two lots. Lot 1 is the centre which accommodates 13,000sqm of mixed use space and 400 car spaces. Completed in 2005, it is 100pc let to a mix of retail, medical and office tenants. One of the retailers is Rewe, a major German supermarket chain.

Lot 2 has a three star, 225 room, Tulip Inn and a four star Golden Tulip and is due for completion on part of this site in December.

Commenting on the Maximilan acquisition, Harry Cassidy, chief executive of CHC, said the Centre "is located in an area largely under-supplied in retail space."

The retail centre covers about 21,840sqm of net lettable space, which is currently leased to 35 tenants, and the Globus DIY chain store, plus the garden centre, extends to an additional 12,500sqm. It was developed by the Procom Group in Hamburg.

Blue chip anchor tenants include top German hypermarket chain Marktkauf, which together with Globus, is owned by the largest German supermarket corporation EDEKA, one of the 10 biggest retail companies in Europe with a 26pc market share.

Other anchor tenants include C&A, one of Europe's most successful fashion retailers, and German drugstore chain Mueller, which operates 462 stores in Europe. Other leading retailers include German shoe retail chain Schuh Siemes and American sandwich chain Subway.

Opened just last November, the property comprises a single storey shopping centre with an adjoining anchor DIY store and garden centre, extending in total to 34,340sqm retail space and with parking for as many as 1,211 cars.

It is built to a high quality design and finish resulting in a spacious, bright and ultra modern development, with interiors specially created to enhance the overall retail and leisure experience.

It was acquired for CHC's Prime Property Fund 1 which is closed for new investment. This fund also undertook prefunding deals on two offices developments in Marseilles, France, being built by French developer Bouygues.

Ian McKee, investment surveyor and divisional director at Knight Frank in Dublin, who has advised CHC on all of its German purchases, says: "Germany is continuing to offer good opportunities to Irish investors. The market fundamentals are strong and there are still good deals to be had in each of the major cities."

Meanwhile CHC has raised about 75pc of the €62m target set for its Prime Property Fund 2 where the minimum investment is €250,000.

Within the top four wealth management companies outside of the big banks, Custom House Capital, currently manages over €1.5bn of client funds in equities and bonds.

© 2008 Irish Independent