Transform a tired suburban office complex from the late 80s into a coherent sustainable and resource efficient ‘core-plus’ office campus with a stable lease profile by way of a targeted refurbishment and repositioning program.
12/2015 Boxberg Capital acquires and co-invests in Business Campus Mainz (“BCM” or “Property”), a 43,500 sqm office campus, and acts as the Operating Partner
11/2022 Sale of the Property (Closing 02/2023)
Invested ca. Euro 18 million from operating cash flow into a large number of modernisation and leasing initiatives
Refinanced Property twice:
2019 First refinancing yielded a 0.7x distribution multiple on peak equity
2020 Second refinancing yielded a 1.12x distribution multiple on peak equity
Increased rent from ca. Euro 4.2 million (ca. 82% occupancy at acquisition and known to drop to 50%) to Euro 6.2 million (91% occupancy at closing)
Renewed or newly rented ca. 42,000 sqm during hold period (70+ lease transactions) at higher rents whilst reducing average fit-out costs. WAULT increased from ca. 2 years to over 5.5 years (with 50+ office tenants).
Digital Connectivity Certification: WiredScore Gold
Sustainability certification: DGNB Gold
COMPREHENSIVE MODERNISATION PROGRAM
During the hold period, Boxberg executed on a large number of initiatives aimed at transforming the Property and enhancing its value, whilst meeting the needs of both current and future occupants. These measures led to a DGNB Gold certification (equivalent to BREEAM Excellent/ Outstanding), as well as a Wired Score Gold certification.
The various initiatives implemented resulted in:
Increased attractiveness to tenants. This has been evidenced by way of higher retention rates, higher rents, increased tenant demand and lower vacancy
Repositioning as a sustainable and future-proof investment. The successful repositioning was evidenced by way of the recent sale of the property, and resilient and diversified demand amongst investors during the whole sale process despite a challenging macro environment
Modernisation and Sustainability-driven upgrades focused on transforming the Property into an efficient and sustainable asset, by improving energy consumption and lowering the climate impact of operations, as well as reducing operating costs for both landlord and tenant.
For example, Boxberg managed the replacement of traditional lighting with a variety of LED alternatives for ca. 40,000 sqm indoor space, ca. 10,000 sqm outdoor space and a 4-storied underground parking garage. Boxberg also arranged the installation of 20 e-charging stations for tenant use and established the potential of additional 250 e-charging stations. The implementation of such measures targeted the “E” (environmental) aspect of ESG principles.
Other and Social-driven initiatives focused on transforming the Property into a more attractive, socially effective space. Measures were strategically designed to generate a more welcoming and engaging atmosphere, promote a sense of community among tenants, and create a positive campus atmosphere. These upgrades included numerous measures, including various architectural improvements and landscaping and the renovation of internal and external common areas. The implementation of these measures targeted the “S” (Social) aspect of ESG principles.
Leasing Management initiatives focused on a comprehensive repositioning and rebranding of the Property in the occupier market. Implemented measures included an optimised leasing procedure which reduced leasing process time and costs for both new and renewing tenants. As a result, Boxberg leased or renewed over 42,000 sqm of space during the hold period, this at progressively higher rents, longer terms and better retention whilst lowering fit-out costs.
Capex and Fire Protection projects included (i) comprehensive capex upgrades to maintain the Property’s competitiveness and relevance in the occupier market and (ii) the development and implementation of a new fire protection concept to increase flexibility and reduce the cost of tenant fit-outs.
Data include ca. 21,000 sqm of office space from a total of ca. 40 lease transactions (incl. 27 new tenants and 13 expansions) since acquisition (i.e. Dec 2015). Prolongations are excluded.