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TH Real Estate invests €150M in Austria | News
TH Real Estate has completed three transactions on behalf of one of their mandates totaling c.€150 million in the first half of the year.
The mandate acquired the Adler & Ameise office building in July, from German investment manager Wealthcap. Located in the third district of the city of Vienna, the asset is a well-established office building comprising c.258,334 sq ft (c.24,000 sq m) of office space and is fully let to a variety of tenants. The property is easily accessible to the city's central business district by railway and provides excellent connectivity to the airport and the southeast of the city. It is also well connected to Hungary and Slovakia.
In June, the mandate acquired a retail warehouse to the east of Vienna, near to the border of Slovakia. The retail warehouse, known as Kittsee K1, comprises c.141,007 sq ft (c.13,100 sq m) lettable retail space and offers 400 parking spaces. Opened in 2013, it is fully let to 15 tenants and is anchored by food retailer Hofer and Eurospar.
Additionally, TH Real Estate entered a 50:50 joint venture with SES Spar European Shopping Centers and acquired Weberzeile shopping centre. Weberzeile comprises c.213,125 sq ft (c.19,800 sq m) lettable retail space, 650 sq m (6,996 sq ft) office space, and 775 parking spaces.
David Moese, Head of Investment, Austria, at TH Real Estate, says: "We are extremely pleased with these acquisitions and believe they are a great fit for our Austrian portfolio. It has enabled us to position the mandate for future growth. The attractive tenant mix of the shopping centre Weberzeile makes it a very good opportunity for the Fund’s portfolio, whilst the retail warehouse Kittsee is situated in near proximity to the border of Slovakia and benefits from a catchment area with almost 128,000 people."
TH Real Estate currently manages €856 million of AUM in Austria. According to its latest research, TH Real Estate believes Austria is one of the most stable real estate markets in Europe. Investors looking for stable real estate markets in Europe have traditionally started with Germany and Austria, as volatility in those countries is significantly lower than elsewhere in Europe. The good economic situation is also reflected by consumers, who are more confident than they have been in a long time. The consumer confidence index reached a new high in Austria since September 2017.*
The steadily growing global e-commerce is also showing significant growth rates in Austria, with online purchase of food continuing to remain a niche. This demonstrates the shopping and retail centers lose far less market share than other retail formats.
TH Real Estate predicts rental growth of two percent in the city of Vienna, which is well above the average of the last seven years, at one percent. TH Real Estate expects a large quantity of new space to come to the market in 2018 – boosted by several real estate projects being built in the past year. However, in the coming years, significantly less office developments are expected, which should lead to stronger rental growth from 2019 onwards.
*Source: Macrobond, April 2018.
Note: TH Real Estate renamed to Nuveen Real Estate in January 2019.
Issued by Nuveen Real Estate Management Limited, 201 Bishopsgate, London EC2M 3BN. Authorised and regulated by the Financial Conduct Authority. TH Real Estate is a name under which Nuveen Real Estate Management Limited provides investment products and services. TH Real Estate is a real estate investment management holding company owned by Teachers Insurance and Annuity Association of America (TIAA). TH Real Estate securities products distributed in North America are advised by UK regulated subsidiaries or Nuveen Alternatives Advisors LLC a registered investment advisor and wholly owned subsidiary of TIAA, and distributed by Nuveen Securities, LLC, member FINRA.