Medical Centre, Chemnitz, Germany (Purchase Closed May 2011, last remaining investment units being offered)
• Opportunity to acquire a significant equity stake in a large (54,500 sq ft) modern medical center well located in the thriving city of Chemnitz ( population 243,000). The rent roll is exceptionally well spread across 34 medical /commercial units and 7 apartments, with a diverse range of medical specialists and related tenants.
• Sourced off market via an insolvency where the asset is under the control of a receiver appointed by DKB Bank with whom we have a strong relationship from previous deals financed by them. We worked with the receiver and DKB over 6 months to secure the deal on attractive terms whereby the initial yield of 7.64% inclusive of acquisition costs is based on existing 84% occupancy rate .The investment is self –funding from Day 1 after all costs, with full capital repayment on attractive bank finance fixed for 4 years , non – recourse to investors .
• The yield can be significantly enhanced within the first year by letting any of the 5 commercial units and 3 apartments that are vacant. There are already tenants interested in some of the vacant units, and it is realistic that occupancy level could be brought up to 90% -95% within the first year thereby increasing rental yields to 8.2%- 8.7% quite quickly although we have assumed a much slower pick up . • The investment is €3.95M funded €2.7M by German non-recourse bank finance and €1.25M by Investor equity.
The objective is to raise the equity from private investors in amounts of €50,000 to €300,000 each. Pre-tax returns of 90% over 5 years, 127% over 7 years (over 18% pa) are forecast based on conservative assumptions as detailed further in the offer document, particularly no capital appreciation assumed. There is no cap on returns and there is real potential to bring occupancy to a high level quickly and to increase rent roll further which could increase returns yet further.
The purchase of the property has completed on MAY 19th 2011. Remaining investment units are now being offered.
The minimum investment is €50,000.
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