Long Harbour buys first assets for €400m ground lease fund
Long Harbour has signed its first ground lease deals for its €400m (£343m) European Secured Income Fund.
The fund has bought the €30m freehold of the Access Tower, a 21-storey office building in the Niederrad district of Frankfurt. Publity AG, the existing owner, has retained the leasehold on a 100-year lease. Long Harbour partnered with Continuum Capital in Frankfurt on the deal.
Long Harbour has additionally exchanged contracts on a further ground lease deal for a hotel in Munich, which is expected to complete in Q2 2021, also in partnership with Continuum Capital.
Long Harbour has signed its first ground lease deals for its €400m (£343m) European Secured Income Fund.
The fund has bought the €30m freehold of the Access Tower, a 21-storey office building in the Niederrad district of Frankfurt. Publity AG, the existing owner, has retained the leasehold on a 100-year lease. Long Harbour partnered with Continuum Capital in Frankfurt on the deal.
Long Harbour has additionally exchanged contracts on a further ground lease deal for a hotel in Munich, which is expected to complete in Q2 2021, also in partnership with Continuum Capital.
The fund’s first acquisition was the freehold of a hospitality asset in central Dublin for around €6m, in partnership with a third-party private equity investor that acquired a 100-year leasehold. The asset is valued at €16m.
LHESIF I launched in November 2019, with initial commitments of €400m and a mandate to deploy capital into commercial and residential ground lease deals in European markets including Germany, Ireland, the Netherlands and the Nordics.
LHESIF I fund manager Richard Silva said: “The interest we have seen so far in ground lease deals is very promising and underlines the strength of the ground lease structure and its potential in Europe, particularly for commercial assets.
“We are in active discussions on further deals and will be looking to broaden our portfolio in Germany and Ireland, as well as to make further acquisitions in the Netherlands and the Nordics.”
William Astor, chief executive at Long Harbour, said: “The current macro environment has only further strengthened the attraction to long income for investors seeking an alternative to bonds, while developers and landlords are looking for alternatives to traditional finance.
“This a relatively new market in continental Europe but one which is rapidly opening up and we expect to make more ground lease investments in key markets this year.”
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Picture © Long Harbour
