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K&L Gates Acts on Strategic Commercial Real Estate Acquisitions for Real I.S., Others

09 August 2021

Sydney – Global law firm K&L Gates has recently advised its clients on a number of strategic real estate capital transactions in Australia, reflecting that there is appetite for strategic growth strategy in the real estate sector. 

Most recently, K&L Gates has advised Real I.S. on the acquisition of 11 Wilson St, South Yarra. This deal follows support for Real I.S. earlier in 2021 on the acquisition of two commercial office assets at 10 Waterloo Street and 119 Kippax Street which, combined, represented the largest single transaction office investment in the CBD fringe area of Surry Hills. 

These recent acquisitions represent the third and fourth transactions for the group of institutional investors building a diversified real estate portfolio in Australia. They follow the Real I.S.' acquisition of an Adelaide office property in 2019. 

Real I.S. Group is one of Germany's leading providers of property investments for private and institutional investors. The Group has property worth more than €11 billion under management in 11 countries across the globe and is represented in six locations in Europe and Australia. Real I.S. has been active in Australia for 14 years, and currently has over €1 billion under management in Australian assets, comprising approximately 10 per cent of the global Real I.S. portfolio.

The property team at K&L Gates has supported Real I.S. with their capital transaction due diligence and negotiations, as well assisting Real I.S. to ensure they met the regulatory requirements imposed on the German based head fund. K&L Gates has also supported Real I.S. on these transactions with their financing arrangements and to meet the Federal Government's Foreign Investment Review Board (FIRB) requirements. 

So far during 2021, the property team at K&L Gates in Sydney has advised on capital transactions worth over AU$750 million across a number of Australian jurisdictions and sectors, including industrial, office, mixed-use commercial and land lease communities. For the team, this level of transactions demonstrates the continued recovery from the interruptions of COVID-19.

Included in this total was the acquisition of a distribution facility, reported to be the largest single asset industrial sector transaction in NSW in 2021, which traded on a 3.63 per cent yield. This new benchmark yield in Australia is reflective of the changes in the industrial property market with the accelerated rise in eCommerce in a post-COVID-19 economy. 

Working on the sale of office, industrial and logistics assets, this mix of property reflects a number of leanings observed by the team of real estate lawyers, with office space still offering a profitable asset, and the need for local warehousing facilities to hold supplies locally and store locally manufactured products. 

Sydney based property partner Samuel Brown commented: "We have seen significant investment and appetite coming from institutional investment entities, bringing both foreign and local capital into the Australian real estate sector. 

We anticipate continued strong activity and our team is already involved in upcoming capital transactions involving industrial, office and retail assets, demonstrating that the pipeline for real estate investment looks strong."

K&L Gates has been named a finalist for Property Team of the Year in the Lawyers Weekly Australian Law Awards. 

K&L Gates is a fully integrated global law firm with lawyers located across five continents. The firm represents leading multinational corporations, growth and middle-market companies, capital markets participants and entrepreneurs in every major industry group as well as public sector entities, educational institutions, philanthropic organizations and individuals.

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