A joint venture between UK-based Benson Elliot and US-based Walton Street Capital, L.L.C. (“Walton Street”), in partnership with Schroders (the “JV”), has sold the Sheraton Hotel in Warsaw to Patron Capital (“Patron”), the pan-European institutional investor focused on property-backed investments. The transaction marks the eighth and final disposal from the Prime Europe Hotels (the “Portfolio”), a portfolio of eight full-service hotels across seven European gateway cities acquired in October 2015.
The eight freehold properties total 2,308 rooms in Venice, Paris, Milan, Rome, Warsaw, Nuremberg and Brussels, and are located adjacent to key demand generators, either in metropolitan city centres, high-growth commercial corridors or leisure destinations.
The JV has unlocked significant value through the deployment of bespoke capital expenditure programmes and asset management initiatives, including room upgrades, management contract renegotiations, and operations and revenue management optimisation. The weighted hold period across the portfolio was 18 months and the assets have all been sold ahead of underwriting, delivering over €600 m in proceeds to investors.
The Sheraton Warsaw is a five star hotel, with 350 bedrooms and is located in the centre of the Polish capital. Under its ownership, the JV deployed c. €6 million to refurbish rooms and common areas, and secured planning permission for an additional ground floor retail unit.
Marc-Olivier Assouline, Benson Elliot Principal and Director of Hotels, said:
“This has been a highly successful undertaking where we joined forces with two long-standing partners, identifying a compelling opportunity with significant value-add potential, which we have now delivered in an efficient timeframe. We achieved attractive pricing for all the assets, taking advantage of the increasing institutional appetite for hotels and delivering superior returns for our investors.”
Stephane Obadia, Schroder’s Head of Hotel Investment, said:
“The acquisition of the portfolio has been a challenging but unique opportunity to bring a new life to one of the most attractive collection of hotels across Europe. While Schroders will continue to manage the repositioning of the most significant properties, this transaction concludes a very successful collaboration with our partners, built on a common vision and a high level of trust put on our capacity to execute such changes.”
Benson Elliot Capital Management, the UK-based private equity real estate fund manager, has raised over €800 million for its latest pan-European value-add / opportunistic fund, Benson Elliot Real Estate Partners V (“BEREP V” or the “Fund”). Launched in 2018, the Fund was substantially raised in six months, with a repeat investor rate of over 95% from the prior fund. The capital was raised by Benson Elliot’s in-house team.
BEREP V was raised from a global group of c. 40 institutional investors, including university endowments, insurance companies, pension plans, sovereign wealth funds and family offices. Approximately 40% of the capital was sourced from the US, 35% from Europe, with the balance from the Middle East and Asia.
BEREP V will continue the Firm’s successful value-add / opportunistic investment approach, which has delivered a 14% net internal rate of return across prior funds. The Fund will target institutional quality assets, with a primary geographic focus on the UK, France, Germany, Italy and Spain, and a principal sectoral focus on offices, retail, residential and hotels.
Laura Coleman, Principal and Head of Investor Relations at Benson Elliot, commented: “We are extremely pleased with the speed and efficiency of this fundraise. Most gratifying is the strong support from our existing investors. It is clear that Benson Elliot’s consistent track record, generated over almost two decades, provides our investors with the confidence to entrust capital to the firm, fund after fund.”
Marc Mogull, Executive Chairman and CIO at Benson Elliot, commented: “Benson Elliot has been, and remains, a specialist in Europe’s middle markets. We have consistently delivered on our commitment to provide superior risk-adjusted returns across cycles. As with previous funds, we’ve consciously limited the size of BEREP V to avoid the deployment-driven pressures that can confront managers of larger funds. We’re fortunate to enjoy significant support from our investor partners, who co-invest alongside the BEREP funds, enabling us to pursue larger transactions. We have a healthy pipeline, but will maintain our characteristic investment discipline, prioritising opportunities that offer realisable value-add potential and a clear path to future liquidity.”
Benson Elliot’s predecessor fund, BEREP IV, had a final closing of €634 m in June 2016. It is fully committed to 18 transactions, having returned c. 50% of invested capital. To date BEREP IV has delivered realised returns of 58% IRR / 1.9x multiple.
A joint venture between Benson Elliot, the London-based private equity real estate manager and Générale Continentale Investissements (GCI), the leading Paris real estate investment and development group, has started works on a 22,300 sqm office redevelopment in the heart of La Défense in Paris.
Latitude will provide 22,300 sqm of Grade A office space over eight floors and will offer occupiers a modern working environment. Its expansive floorplates – a rarity in a La Défense market dominated by tower blocks – will feature landscaped break-out areas, as well as state-of-the-art amenities for both tenant and public use. Latitude is scheduled to complete in Q2 2020.
Latitude is distinctive for its lateral design, conceived by the award-winning STUDIOS Architecture. The building will be highly visible in the La Défense market, situated adjacent to the La Défense ring road and close to the Centre of New Industries and Technologies (CNIT), a major convention centre and La Défense landmark.
Rémi Monglon, Principal and Head of France at Benson Elliot, commented: “After two years of hard work, alongside first class architects and developers, we are pleased to introduce Latitude. The property has a unique design, and upon completion will deliver efficient, top quality office space, with the highest environmental credentials, into a sub-market seeing limited new supply.”
“We are truly excited about this project and are confident that Latitude will make a significant contribution to the new, vibrant face of La Défense. We are offering our users highly flexible and new ways of working. Our aim is to expand what is possible within a working environment and enhance what this world-class business district has to offer.” said GCI Managing Director Sharon Raingold. “In an area where towers dominate the skyline, we believe the large, lateral floorplates of Latitude will encourage a less hierarchical and more forward-thinking business model, where innovation and collaboration can be celebrated,” Sharon continued.
La Défense is Europe’s largest business district and is home to over 500 companies, including multinationals and Fortune 500s. Following recent infrastructure investment, accessibility to public transport has significantly improved, with Latitude now linking directly to the CNIT and the main hub of La Défense.
Latitude will be built to the highest environmental standards and is set to receive CSR credentials including HQE ‘Exceptionnel’, BREEAM ‘Excellent’, Effinergie+, Well Core and Shell ‘ready’, Wiredscore Platinum.
Bouygues Bȃtiment Ile-de-France – Rénovation Privée has been engaged as general contractor and financing was secured from BNP Paribas and SCOR.
Benson Elliot, the UK-based private equity real estate fund manager, has acquired 100% of the units in an Italian real estate investment fund, ER Office Fund 3 (“EROF3”), which has acquired adjacent business parks in Segrate, northeastern Milan. EROF3 is managed by Europa Risorse SGR, a Bank of Italy regulated fund manager. The two business parks were purchased in separate transactions, from BNP Paribas SGR and from Toscanini Fund, managed by Generali Real Estate S.p.A. SGR.
Segreen Business Park, acquired from BNP Paribas SGR, comprises c. 27,000 sqm of grade A office space in two buildings, with parking for over 900 cars. The project was delivered to high environmental standards (LEED Gold and Platinum certifications) between 2011 and 2013. Segreen Business Park is over 90% occupied by a group of largely international corporates, including Kraft Heinz, Lenovo and Zimmer Biomet.
Nest Business Park, acquired from Toscanini Fund, managed by Generali Real Estate S.p.A. SGR, comprises 18,000 sqm of office space in three buildings, together with parking for over 500 cars, set within a beautifully landscaped environment in Segrate. Originally developed in the 1980s, the buildings were previously the Italian headquarters of Microsoft. Currently vacant, the property presents an opportunity for substantial refurbishment and integration with the popular and prominent Segreen Business Park.
Joseph De Leo, Benson Elliot Senior Partner, said: “We’ve been engaged in the Milan market for decades, but see a particularly compelling investment story right now, as growing demand for grade A office space confronts very limited new supply. We’re well positioned to capitalise on the opportunity given our local capabilities, and look forward to delivering some attractive new office accommodation into this increasingly strategic locale.”
Europa Risorse will implement the value-enhancement strategy, drawing on their deep local knowledge and extensive asset and development management skills. Nest will be redeveloped and integrated with Segreen, consolidating the two business parks to create a larger, better organised offering, with increased floor area. The finished product is expected to achieve LEED Gold certification, and provide state-of-the-art amenities including restaurants, a conference centre, a nursery and a gym.
Segrate is situated just 10km from Milan’s city centre and a few minutes from Linate International Airport. Linate will see over €150 million of investment in the near term, as the airport adds a new terminal. Segrate itself is seeing significant infrastructure investment, with €400 million in road and rail works planned (including the extension of the Metro to Segrate), in part to support the c. €1.4bn development of Westfield Milano set to open in 2021.
Benson Elliot, the UK-based private equity real estate fund manager, has sold Turmcenter, its landmark CBD Frankfurt office building, for €155 million. The asset was sold to a global investor advised by UBS, and has delivered an equity multiple of 3.5x to Benson Elliot investors.
The 21-storey high-rise tower was acquired vacant in December 2013, with the intention to undertake a comprehensive re-development of the asset. Benson Elliot executed its value-add plan entirely in-house, implementing an innovative technical design with unrivalled energy savings. The finished product has delivered 17,300 sqm of exceptionally efficient floorplates, with state-of-the-art specifications and services.
Turmcenter opened in May 2016 and was awarded LEED Gold Certification for its environmental achievements. These credentials, together with the building’s striking design, which features floor to ceiling glazing and an impressive double height reception, have been key drivers of the building’s successful leasing efforts. With its dynamic marketing approach, the Firm has achieved 85% occupancy and set a new rental level for the area. Tenants include the Deutscher Fußball Bund, advertising agency Spark44 GmbH, law firm Fieldfisher LLP and boutique investment bank VictoriaPartners.
Joseph De Leo, Benson Elliot Senior Partner, said: “This marks another successful transaction for Benson Elliot in Germany and is illustrative of what we do best: we identified an institutional quality asset in need of a creative re-development approach, in a market with strong fundamentals. We implemented a hands-on value enhancement strategy, brought the asset down the risk curve and delivered it back into the core market. We are extremely pleased with the institutional quality of the product we have delivered, and the strong lease-up pace and successful exit are a testament to that.”
Georg Strassner, Principal and Head of Germany at Benson Elliot, said: “Benson Elliot is committed to investing in sustainable buildings and our re-development of Turmcenter has set a new environmental standard in the property industry for energy efficiency. Not only is Turmcenter one of the most energy efficient office buildings in Germany, it also offers high quality and flexible features, which create a work environment suitable to a wide range of tenants.”
During the sale Benson Elliot was advised by CBRE and Freshfields Bruckhaus Deringer.
The title of this year’s lecture, which pays homage to Honor Chapman CBE, Head of Research at Jones Lang Wootton during the 1990s / 2000s and a guiding light in planning the growth of modern London, was: “How Inclusive Leadership Leads to Inclusive Growth”.
The event was hosted by London & Partners, the official promotional agency for London, under the auspices of the University of Cambridge (Department of Land Economy). Also participating were past lecturers Annie Hampson OBE (Chief Planning Officer at the City of London Corporation), Dame Judith Mayhew (past leader of the City of London Corporation), and Alison Nimmo CBE (Chief Executive of The Crown Estate). The evening’s proceedings were chaired by JLL’s International Director Katie Kopec.
The lecture series was conceived by Marc Mogull, Executive Chairman of Benson Elliot Capital Management and a Senior Fellow in the Land Economy department at the University of Cambridge, alongside two former colleagues of Honor’s: Rosemary Feenan, former Global Head of Research at JLL, and Andrew Gould, former Chief Executive of JLL UK. In addition to the past lecturers, the other members of the organising committee are Katie Kopec and Robert Gordon Clark, Chairman of the London Communications Agency.
In her remarks, Dame Vivian challenged the audience to embrace diversity and inclusion as explicit strategies for driving performance and economic growth – both from the public and private sector perspectives. She remarked: “If, as a city, we remake our organisations to be diverse and inclusive, imagine the value we could realise. Preparing for cultural, technological, and economic change over the coming decades means building and scaling a city to be inclusive.”
Commenting on the evening’s success, Marc Mogull said: “Benson Elliot has been a proud supporter of the Honor Chapman Memorial Lecture since its inception. The lectures have offered guidance from – and highlighted the achievements of – some of the UK’s most accomplished women leaders, and continue to inspire future leaders. Dame Vivian’s comments were a timely reminder of not just the importance, but the power of diversity and inclusion.”
For further information:
+44 (0) 20 7808 8900
Dido Laurimore / Claire Turvey / Jeanne Provencher
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Benson Elliot, the UK-based private equity real estate fund manager, acting on behalf of its pan- European fund Benson Elliot Real Estate Partners IV L.P. (“BEREP IV” or the “Fund”), has entered into an agreement to forward fund the purchase of Curve, a new office development being constructed in Saint-Denis (Greater Paris). The off-market acquisition from BNP Paribas has been completed in joint venture with Générale Continentale Investissements.
Curve will provide 24,000 sqm of grade A office accommodation arranged over eight floors, with c. 250 sqm of ground floor retail space and 257 parking spaces. The site lies in Saint-Denis, the second largest office market outside of Paris (after La Défense). The area has proven attractiveness and resilience, with a diversified tenant base and >200 large corporates (including Orange, Generali and SNCF). Delivery of the project is planned for early 2020, with the completed project having an expected end value of c. €200 million.
Trish Barrigan, Benson Elliot Managing Partner, said: “This is a quality project in a Paris sub-market experiencing high levels of tenant demand, but confronting a shortage of modern office space. Our project team worked with BNP in the run-up to acquisition to optimise design, specification and efficiency, and improve the building’s overall appeal. We’ve worked with GCI on projects in Paris for more than 20 years, and look forward to adding Curve to our list of joint achievements.”
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Trish Barrigan, Managing Partner
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Dido Laurimore / Claire Turvey
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The Station Hill site is situated directly in front of the main entrance to Reading Railway Station, which has recently undergone a major redevelopment and enhancement in advance of the opening of Crossrail in 2019. The site, which already has outline planning permission and an agreed Section 106 for a combined office and residential development, is one of the largest development schemes outside of London and has a GDV exceeding £750m.
Lincoln MGT is a strategic joint-venture between the US developer Lincoln Property Company and UK based MGT Investment Management. The joint venture combines the commercial and residential development experience and operating skills of Lincoln Property Company, which is one of the largest full-service real estate companies and the second largest manager of multi-family / PRS units in the United States, with the pan-European investment experience and strategic focus of MGT Investment Management.
Henry Morris, Manging Director at MGT Investment Management said: “We are delighted to have secured this outstanding mixed-use development site, which is the first investment for Lincoln MGT in the UK. The Lincoln MGT partnership brings complementary skill sets to the joint venture with MGT leading on acquisition and investment management, and Lincoln Property Company leading on development, construction, leasing and property management.”
Troy Javaher, Managing Director of the European operations at Lincoln Property Company said: “The site occupies an exceptional location next to Reading station, which has benefitted from a massive infrastructure improvement in recent years with the station’s redevelopment and the expected delivery of Crossrail’s Elizabeth line in December 2019. We understand the strategic importance of this infill development to Reading’s continued economic growth, and we look forward to working with the council, the local community and other stakeholders to bring forward an outstanding mixed-use development.”
David Camp, Chief Executive of Stanhope plc, said: “Sackville Developments Reading Ltd (SDRL) is pleased to confirm that it has sold its interest in the Station Hill development to Lincoln MGT. SDRL has prepared the site for development, including demolition and other works and the creation of a successful temporary events space and the Biscuit Tin coffee shop for the community. We have worked very effectively and closely with Reading Borough Council over many years to ensure that the redevelopment brings forward the maximum benefits of regeneration to the area around the station and we are delighted that it is in safe hands with the new owners to deliver this fantastic scheme for Reading.”
James Jakeman, Partner, Benson Elliot, said: “Benson Elliot and Stanhope have worked closely together over the last number of years to deliver one of the south east’s most strategically important and high profile development opportunities. It has been an exciting undertaking to be involved with, and having accomplished our objectives against the backdrop of a strengthening local market and beneficial large scale infrastructure projects, we are now in a position to hand the site over for its next phase and to crystallise value on behalf of our investors.”
Lincoln MGT was advised by LSH and Knight Frank. The vendor, Sackville Developments Reading Ltd, was represented by CBRE.
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Slough Retail Park is the dominant furniture park in the local area, totalling 152,467 sq ft of accommodation across eight retail warehouse units with 546 on-site car parking spaces. The park is fully-occupied by high-quality tenants including DFS, The Range, Sofology, Wren Kitchens and Smyths Toys, providing a total rental income of £3,603,195 per annum, reflecting an average rent of £23.63 per sq ft. The asset has a WAULT of 6.4 years and occupies a substantial site totalling 9.7 acres (3.9 ha).
Asset management initiatives undertaken by Benson Elliot since their acquisition in 2016 following the EU referendum include growing the income by re-basing the rental tone across the park and implementing a modest capex programme to upgrade the park’s signage and create new façades across the existing units.
The retail park benefits from a prominent position adjacent to the A4 (Bath Road), 1.3 miles west of Slough town centre, within 1.2 miles of the M4 motorway and 7 miles of Heathrow Airport, drawing on a wide and affluent catchment. Slough is set to benefit from the arrival of Crossrail (The Elizabeth Line) in 2019, which will provide access to London’s West End in 30 minutes. In addition, Slough’s town centre is in the process of undergoing a major regeneration, with a £900m residential-led redevelopment of the Queensmere Observatory shopping centre and a £450m edge-of-town new commercial and residential district.
Barney Rowe, Partner at Orchard Street, commented: “Slough has the fastest-growing population in the UK, an increasingly affluent South East catchment, connectivity to Crossrail from 2019, and major regeneration projects underway, all of which stand to benefit Slough Retail Park. The park is well-located and serves as the local area’s principal furniture destination, presenting a compelling investment proposition”.
James Jakeman, Partner at Benson Elliot, commented: “During our period of ownership we have been able to deliver significant income and value improvement from an institutional asset that already boasted strong fundamentals. Following an off-market approach from Orchard Street, we decided to crystallise the value created through our pro-active management.”
Orchard Street was advised by Morgan Williams, whilst Benson Elliot was supported by Cube Real Estate.
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Orchard Street Investment Management
020 7494 8860
Dido Laurimore/Ellie Sweeney
020 3727 1000