Hines Fund Makes Berlin Debut With $178M Acquisition

Atrium Charlottenburg. Image courtesy of Hines

On behalf of its Hines European Value Fund, Hines has acquired the Atrium Charlottenburg office building in Berlin for a price in excess of €160 million ($178 million). The nine-story building features 40,000 square meters (430,600 square feet) of net rentable space.

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Located at Kaiserin-Augusta-Allee 31, just north of the Spree River, the building is within Berlin’s S-Train circuit and close to the Mierendorffplatz subway station, and not far from the Zoologischer Garten, Berlin’s main train station (Hauptbahnhof) and Highway A100.

The building is 100 percent leased. Since 2003, the property has been the headquarters of FOKUS, the Fraunhofer-Institut für Offene Kommunikationssysteme, its anchor tenant, which specializes in applied research and development in information and communications technology. Parent entity Fraunhofer Society is Europe’s largest applied R&D organization.

Landesbank Hessen-Thüringen Girozentrale (HELABA) was the financing bank, and Hines’ legal advisor was Pöllath & Partners. BNP Paribas Real Estate advised the seller, which was not identified.

Invested in Europe

The acquisition of Atrium Charlottenburg is Hines European Value Fund’s first investment in the Berlin office market and the fund’s seventh investment since December 2017. More than 65 percent of the fund’s €721 million investor equity commitments have now been allocated to a diversified portfolio of office, retail, hotel, residential and logistics properties in Germany, Denmark, Spain and the United Kingdom.

A Hines spokesperson provided Commercial Property Executive with a breakdown of the other six properties:

• Stuttgarter Tor, Stuttgart, 159,500 square feet
• Universitet Passagen, Copenhagen, 235,950 square feet
• MediaComplex, Barcelona, 344,450 square feet
• Cribbs Causeway Distribution Centre, Bristol, 423,200 square feet
• 354-358 Oxford St., London, 136,100 square feet
• Allianz Karlshöhe Portfolio, Stuttgart, 958,650 square feet.

In a prepared statement, Christoph Reschke, senior managing director of Hines, highlighted Berlin’s excellent long-term prospects and noted that Hines’ strategy is to overweight the company’s Berlin exposure. The office market there, Reschke explained, is seeing a substantial increase in non-traditional office locations in the inner city.

In the third quarter of this year, Berlin saw its strongest office leasing performance since 1999, according to an October report from JLL Germany, which predicts that the overall vacancy could be down to about 1.8 percent by year-end.

Office rents in the Charlottenburg-Tiergarten submarket range widely, from €16 to €26 per square meter per month ($19.80 to $32.30 per square foot per year), again per JLL.