June 8 (Bloomberg) -- Dundee International Real Estate Investment Trust, which made last year’s biggest German commercial property acquisition, plans to spend about 300 million euros ($373 million) a year buying office buildings in the country, President and Chief Executive Officer Jane Gavan said.
Germany’s real-estate market is attractive because the economy is robust and property buyers can borrow at low interest rates, Gavan said in an interview yesterday. The Bundesbank today raised its German gross domestic product growth forecast for 2012, to 1 percent from 0.6 percent, citing a sturdy global economy, cheap financing conditions and solid domestic spending.
“We have a lot of confidence in the German economy,” Gavan said. “We’re seeing some really interesting product on the market.”
The Toronto-based REIT has invested all of its about C$1 billion ($970 million) in assets in Germany. Dundee is among non-German investors buying commercial properties from eight German real-estate mutual funds that have gone into liquidation in the past two years. Gavan said Dundee is exploring the funds’ holdings for buildings valued at less than 100 million euros.
Earlier this year, Dundee International purchased an office building in Nuremberg from mutual fund SEB ImmoInvest for about 48 million euros and it acquired Deutsche Grammophon GmbH’s former headquarters in Hanover for about 26 million euros.
The REIT paid 740 million euros for 292 post offices in 2011, the year’s biggest commercial property purchase in Germany, according to Ernst & Young LLP. The deal followed Dundee International’s raising about C$410 million in an initial public offering.
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