Alstria Office-REIT has agreed to acquire two office buildings in inner city locations in Hamburg for a total transaction cost of around EUR 20 mln in an off-market transaction. The Hamburg-based investment company said that the properties offer significant value creation potential, as the vacancy rate of 24% provides scope for active asset management measures.

Asset manager Argoneo, which has managed the properties since 2007, coordinated the transaction process for the seller.

The buildings, which have a combined lettable area of around 9,400 m2, are multi-tenant properties with a weighted average lease length of 3.2 years. They currently generate a total rental income of around EUR 1.2 mln per annum. The transaction is being financed by EUR 9 mln of equity and a new five year non-recourse loan of EUR 14 mln. The loan also includes a EUR 2.5 mln capital expenditure line. The transfer of properties is expected to happen at the end of the first quarter 2011.

'This second transaction has allowed us to fully invest the proceeds of our September capital increase and to demonstrate our ability to source and execute attractive transactions in the German office market', said CEO Olivier Elamine.