Doughty Hanson in real estate exit

Doughty Hanson's real estate arm has sold one of its largest investments to German fund DEGI in a deal worth more than E200m.

Doughty Hanson & Co Real Estate, the real estate business of buyout firm Doughty Hanson, has sold Bodio Properties, owner of the Bodio Center office development in Milan, to German fund DEGI (Deutsche Gesellschaft für Immobilienfonds), a subsidiary of the Allianz Dresdner real estate group.


The transaction, one of the largest realisations by a private equity real estate fund in Europe this year, values Bodio Center at over E200m, and is Doughty Hanson’s largest realisation to date.


Doughty Hanson’s real estate arm acquired the Bodio Center site, a former office and production facility, from Alcatel in December 2000. Since then,  has transformed the derelict site into a business centre comprising 65,000 square metres of office space and underground parking for over 700 cars. 


The Doughty Hanson & Co European Real Estate Fund was established in 1999. The fund comprises equity commitments in excess of $630m from institutional investors worldwide and has made investments totalling over E1bn.   With the proceeds of the Bodio sale, investors in Doughty Hanson & Co Real Estate will have received cumulative distributions of more than 50 per cent of cash invested. The sale is forecast  to deliver a 3.3 times return on cash invested.


The transaction is Italy’s second major real estate deal involving a private equity firm in 2003. In March, Carlyle Europe Real Estate Partners acquired a portfolio of 36 commercial properties in Italy from the Italian ministry of finance. The deal saw the firm pay E230m for the assets, which cover a total of 290,000 square metres.


News of the exit comes in the same week that the firm held a first close of its buyout fund, Doughty Hanson IV, on E700m. The fund is targeting a total raise of E3bn for both mid-market and large buyouts in Europe.