€141.3m Hamburg property deal

IRISH investors have sunk over €140 million into a commercial venture in Hamburg, Germany.

Davy Private Clients sealed the deal on behalf of investors and it has identified the Hamburg area, as well as Munich, as key investment targets to be exploited further.

For a total outlay of €141.3m Davy has acquired a major retail and office property (Spitaler Hof) in Hamburg on behalf of clients.

This property covers 225,000 sq ft, with 65% of the rental income generated from retail, and the remainder generated from office letting and car park rentals.

Davy acquired the property from the open-ended German property fund DIFA at a yield of 5.4%.

David Goddard of Davy said for the next few years Germany will be the “property story” as far as he is concerned.

“The reality is that retail spending in Germany has been flat for the past 12 years. That is about to come to an end and, as the German consumer starts to regain confidence in the economy, the major beneficiary of that will be the retail sector,” he said.

Hamburg and Munich will be the group’s target investment areas and a deal for a further €30m is due to be finalised within weeks.

Of the €6 billion invested on behalf of private clients about €2.5bn is in property, the bulk of it in the Irish market.

However, Davy has investments in Europe on behalf of clients and currently has about €300m in European markets, including Paris and Brussels where Bank of Ireland Private Banking has several hundred million.

Last week Quinlan Private, which has over €5bn in property in Britain and Europe, formed a major new partnership to exploit the mainland European market even further.

It has linked up with the Chicago Golub & Company in a new joint venture company, Quinlan Private Golub, to create one of the largest real estate development groups operating in Central and Eastern Europe.

Meanwhile the Irish property market remains very active as HKR Architects yesterday announced two multi-million euro projects in Ireland.

It has been granted planning permission to develop Clancy Barracks near Dublin’s city centre, and for a major project involving the redevelopment of the 42-acre Bray Golf Club site.