Heitman Enters New Market With $120M Portfolio Buy

BRATISLAVA, SLOVAKIA-Heitman LLC has entered this market for the first time with a $120-million portfolio purchase, the largest institutional purchase made in the Slovakian market to date. On behalf of its second Central Europe property fund, the Chicago-based real estate investment management firm acquired this county’s largest office complex, a three-building development comprising 650,000 sf. The firm’s previous investments in Central Europe have focused on Poland, Hungary and the Czech Republic.The portfolio consists of two five-year-old office buildings containing approximately 250,000 rentable sf and one newly constructed class A office property of approximately 400,000 rentable sf. Christopher Merrill, managing director of Heitman’s international private real estate equity group, tells GlobeSt.com the two older buildings serve as headquarters to one of the country’s top telecommunications companies, Orange Slovakia. The new building is 80% leased to several tenants, including Accenture, SAP, Whirlpool and Alcatel. The going lease rate for the new tower is said to be consistent with cities like Prague.The two older buildings were acquired in a joint venture with the developer, BSR Europe, a subsidiary of BSR Engineering and Development, and Leader Holdings and Investments. The new property, which is still in lease-up, was 100% acquired by HCEPP II. Heitman was advised by Salans, which worked in cooperation with the law firm Cernejova & Hrbek. HVB-Slovakia provided the financing.Heitman’s clients include US and international institutions, pension plans, endowments and foundations, and individual investors. Heitman entered the Central European property market in the mid-1990s, and says it is now has the largest on-the-ground presence of any real estate investment manager. The acquisition is the sixth major investment in the Central European region for Heitman’s HCEPP II fund, which was launched with euro 175 of equity and–using 70% to 80% leverage–now holds $500 million in gross assets. Merrill says that if deals now in the works close as expected, the fund will be nearly fully invested.