Zug/London, 31 May 2016 – Europe has long been recognised as an attractive destination for investment on the global transaction market. Last year saw substantial investment in the EU, which was largely attributable to the Asia-Pacific and North America regions. Now,the initial market analysis of Q1 2016 shows that interest in the market is unchanged. In 2015, the value of international acquisitions came to a total of USD 487.8 billion, according to information from BakerMcKenzie. The sale of Cologne’s Lanxess Arena, the neighbouring office buildings and car park is a textbook example of a successful cross-border transaction. Jersey-based investment and fund management firm Arminius was able to find two investors for the club deal: Mirae Asset Global Investments, from South Korea, and Hong Kong-based Junson Capital. Mirae Asset Global Investments Co., Ltd has the largest investment management presence in South Korea, managing a total of USD 80 billion worth of assets, while Junson Capital is a family office based in Hong Kong. Arminius’ major challenges were to introduce the complex asset structure to first-time investors in Germany, as well as the particular nature of the Lanxess Arena’s asset class. The globalisation of real estate transactions also increases the demands placed upon underlying processes. The virtual data room provided by European market leader Drooms was selected in order to carry out the online due diligence processes. This provided all stakeholders with secure access to transaction-relevant documents regardless of their location and ensured that the cross-border transaction could proceed efficiently.
Asian investors tap into a new market
After a seven-month period during which the transaction was brought about and secured under the management of Arminius, a further six months of intensive cooperation between Mirae and Junson were required in order to close the deal. To break into the new market, participants were first faced with the task of familiarising themselves with the different market practices, standards and cultural differences. Previously, Mirae and Junson were active as investors in the USA and Asia. They are seen as demanding investors. Peter Jun, Co-Founder of the Arminius Group: “In such situations, it is important to handle possible cultural differences transparently and patiently, with trust and mutual respect.”
Germany is an attractive target for foreign investors
Chinese investors are increasingly on the lookout for new markets. In 2015, the investment volume from cross-border transactions amounted to a significant USD 65.8 billion – Chinese investors were primarily focused on Europe. Peter Jun describes the trend over recent years: “Germany represents a comparatively safe investment location for foreign investors, on account of its economic strength and the investment return which has remained attractive.” In addition to pursuing its opportunistic investment strategy, this transaction has allowed Arminius to tap into a new business segment: stabilised real estate assets. Further investments are currently in the pipeline.
Arminius is an independent and owner-operated investment and fund management firm exclusively focused on German real estate investments. Arminius’ strengths lie in the procurement, preparation and completion of transactions in Germany, as well as asset management. Since being established in 2006, various closed-ended funds and special purpose vehicles enabled Arminius to acquire and dispose of approximately EUR 4 billion of real estate assets across Germany.