Rutley European Property Limited acquires more than €160m of property assets
Date: 23 October 2006 | 
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Rutley European Property Limited (“REPL”), a pan-European real estate fund announces the acquisition of European property assets totalling €104.75m with the majority being purchased off market. A further €58m of investments have been notarised and a further €31m of properties are under offer.
In February 2006, REPL, a closed-ended, Guernsey-registered investment company privately placed €114m of equity with institutional, hedge fund and private client investors. It is managed by Rutley Capital Partners (“RCP), the real estate private equity business of Knight Frank. REPL targets core-plus commercial property assets in Central and Eastern Europe with a target leveraged IRR in excess of 12%. The Fund seeks to identify assets that offer prospects of rental growth and yield compression, enhanced through programmes of active management.
Nick Burnell, Partner, Rutley Capital Partners said:
‘We are delighted to have created a portfolio of such good quality investments in only a few months, and, on schedule. With assets yielding around 7%, and some with excellent upside potential, we have clearly demonstrated our ability to exploit the immaturity and imperfections that still exist in the European real estate markets to the benefit of investors. Our record in identifying and closing investments is testimony to the unique competitive advantage conferred by our close association with Knight Frank’s European office network and the exceptional market penetration it offers. .’
Details of the properties acquired:
Buma Square, Poland is a 28,835 sq m modern office and retail complex situated in a prime location in the southern part of Krakow, an important economic, educational and historic centre and was acquired for €51.15m. The strong tenant line up includes Motorola Polska, Electrolux and Tesco Poland. The total purchase price reflects a net initial yield of 7.11%.
Mosse Zentrum, Berlin is a 14,186 sq m multi-storey office block situated in the southern end of the Mitte district of Berlin, the CBD, and was acquired for €32m. 71% of the space is let to seven anchor tenants including DEGES, Total Deutschland and Renault Nissan. There is significant upside potential to enhance returns through leasing the vacant accommodation. The total purchase price reflects a net initial yield of 6.54%.
Prima Court, Poland is a 3,480 sq m mid-terrace office building situated in close proximity to one of Warsaw’s main throughfares and within the principal office location. 91% of the property is let to 12 strong covenants including MWPRiK, FPR and Manpower Polska Sp.Z.o.o. The total purchase price of €11.35m reflects a net initial yield of 7.05%.
Two prime Retail Warehouses have been acquired in Wiesbaden, providing 4,275 sq m of floor space. The warehouses are situated in excellent trading locations on the outskirts of Wiesbaden City, a wealthy satellite of Frankfurt. Anchor tenants include an Aldi discount food store and 4 national and regional discount retailers. The purchase price of €10.25m reflects a net initial yield of 7.12%.
A further 22,000 sq m of German property has been notarised at a cost of €58m. The portfolios comprise office buildings and two new retail warehouses with the latter being let to excellent tenants on new 15 year leases. The purchase prices reflect net initial yields of in excess of 7%.
Commenting on the outlook for European real estate, Nick Burnell continued:
‘I believe there is still significant value to be harvested across Europe but it will be a return to the 'old faithfuls' for value creation from now on: genuine market understanding, asset selection and active management will be the key drivers. Comprehensive, detailed market knowledge and penetration are now indispensable tools; the transparency and ease of access that we take for granted in the UK simply does not exist, even in old European countries, such as Germany. The direct consequence of this environment is an uneven perception of value, which, in effect, creates an arbitrage opportunity for the intelligent investor.’
For further information, please contact:
Nick Burnell, Partner
Rutley Capital Partners
Tel: 020 7861 1230
Louise Hatch/Tilly von Twickel
M:Communications
Tel: 020 7153 1516
Notes to Editors
Rutley Capital Partners
Rutley Capital Partners (“RCP”) is a specialist manager of international real estate offering investment management services to institutions and private investors.
Established in 2005, Rutley Capital Partners is the real estate private equity business of Knight Frank, the international property consultancy. Although wholly-owned by the Knight Frank Partnership, Rutley Capital Partners is managed as an independent entity and its senior executives are remunerated solely according to its performance.
Through structured investment vehicles RCP seeks to offer investors a varied range of real estate exposures, classified by geography, asset class and risk:return profile.
RCP’s significant competitive advantage in the global property market draws upon unique access to Knight Frank’s global office network, real estate expertise and international market penetration, whilst maintaining autonomy to utilise best in class advisors or agents where investor returns can be optimised.
Based in London, RCP currently manage assets of approximately €200m for institutions and high net worth individuals. For further information about the Company, please visit www.rutleycapitalpartners.com
Knight Frank
Knight Frank is the leading independent global property consultancy. Headquartered in London, Knight Frank and its New York-based partner Newmark Knight Frank operate from over 166 offices in established and emerging property markets on six continents. Last year, the companies handled transactions valued at over $41 billion with annual revenues of over $545 million. With a combined staff of 4,500, this major force in real estate is meeting the local and global needs of owners, tenants, investors and developers worldwide. For further information about the Company, please visit www.knightfrank.com