Cologne-based multi-family office for real estate assets DERECO has purchased a new building in an A1 location in Herford, Germany, as an addition to a portfolio it has been commissioned to develop on behalf of a German entrepreneur family. Upon transfer, the property will be managed by DERECO’s asset management.

The building was sold by a project-developing company established as a joint venture by HLG Gesellschaft zur Entwicklung von Handelsimmobilien mbH & Co. KG, Münster, and Amandla International GmbH & Co. KG, Unna. In the past, DERECO has successfully concluded another forward deal concerning real estate in Detmold with the same project developers.

By 2018, the plan is to create a new retail magnet in Herford’s pedestrian zone. The property is expected to solve an urban planning issue in central Herford, too, since part of it, a former Kaufhof department store, has been disused for years. As two adjacent buildings have been demolished, the newly created complex now has better access; its premium position is highlighted by a redesigned square in front of it. Lead tenants include C&A, a Rossman drugstore outlet and CCC Schuhe. In future, other retail, catering and office tenants and a gym will attract more walk-in custom. Several wings surrounding a central patio will host attractive new flats over a number of added floors in this central location.

The asset deal transaction totals a volume of approx. € 24m.

The buyers received legal advice from Taylor Wessing, Berlin, and technical support from Drees & Sommer, Dusseldorf. The sellers’ party obtained legal consultancy from Jebens Mensching LLP, Hamburg.

The DERECO multi-family office intends to continue its long-term purchasing policy in 2016, focussing on economically strong towns with a population from 50,000. New buildings and existing properties (no older than five years) across Germany between € 10m and € 30m are generally eligible as acquisitions. On the whole, DERECO favours multi-tenant buildings fit for various purposes, which implies that single-tenant projects would not be in line with the company’s acquisition strategy. DERECO has invested in mixed retail and office buildings in A1 locations and in new apartment constructions in good neighbourhoods rounded off by complementary retail. Additionally, DERECO is searching for retail parks to add to its existing portfolio. DERECO’s current portfolio policy does not cater for office buildings or specialty properties such as hotels, care homes or logistics facilities.