Fidelity International real estate business expands into Germany

Fidelity International’s Real Estate Business is planning to expand into the Continental European market with the opening of a dedicated Fidelity Real Estate Business office in Munich, and the first German purchase for Fidelity’s new Pan European Real Estate Fund.

The new office is currently going through its regulatory notifications. Going forward, it will provide a strategic base for Keith Sutton, Fidelity’s Director of European Real Estate, from which he will identify and manage real estate on the Continent. Mr Sutton will now look to expand the real estate management team based around Fidelity’s network of European offices.

In addition, Fidelity is pleased to announce that it has made its first German purchase for its Pan European Real Estate Fund - an office building in Munich for €17.85 million. The purchase reflects a yield of 5.9% and the building is fully let to Olympus Life Science Research Europa. The tenant has just completed fit-out works and taken a new ten year lease with annual indexation.

“We already have a team in London and Luxembourg and our vision is to continue our expansion into other key centres such as Paris, Frankfurt, and now Munich” said Keith Sutton, Director of European Real Estate, Fidelity International.

“Munich lies in one of the strongest economic regions of Germany - it is the perfect location for the Real Estate Business’ latest European office. From Munich, I can be close to the key real estate markets on the Continent, some of the best talent in the industry is located here, and it puts us at the heart of where our German clients need us.

“Finding the first German property for our Pan-European Real Estate Fund in Munich is no coincidence – again, it demonstrates the attractions that we are currently seeing in this city. The high specification of the building permits it to be used both as high quality offices and as a specialist R& D centre. This deal was secured off market and provides an attractive running yield with upside potential from a very moderate rental level.” Fidelity sees it as a defensive play that will sit well with other deals we are close to completing that have more opportunistic characteristics.

Pilger Rechtsanwaelte acted as legal adviser to Fidelity International.

The new property acquired in Munich represents the sixth acquisition of an on-going programme to create a Pan-European portfolio. Further purchases are expected to be announced shortly.