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The Tango Portfolio

The Netherlands, Europe

The Tango Portfolio consisted of 13 office buildings totalling 650,000 sq. ft. located across The Netherlands including Maastricht, Eindhoven and Den Bosch. It offered a combination of long term income from a variety of tenants at the same time as providing scope for asset management including leasing vacant space, renewal of existing leases and upgrading the building energy labels.

The Tango Portfolio was acquired off-market with a total investment of over €100,000,000. It was held in a limited liability partnership in conjunction with a general partner. The asset was purchased in a joint venture with an Amsterdam-based investment manager and private Dutch investors with Kout Capital advising various Middle Eastern backed investors.

During the investment hold period, the Tango partnership established detailed business plans with initiatives that were mainly focused on maintaining and increasing occupancy levels in order to deliver income to investors. The Dutch market was volatile during the investment period and management needed to be flexible and methodical to protect the value of the portfolio. Physical occupancy was improved and the weighted average lease term increased to 7.2 years at exit from less than 4.0 years at purchase.

Despite the difficult office market in the Netherlands, Tango remained a stable investment, with 75% of revenue resulting from long term tenants allowing the cash flow to generate a regular actual cash yield in excess of 8.0% p.a.

Kout Capital acted on this transaction as an investment manager for its trusted clients and were represented by Savills and DLA Piper. The investment was financed by FGH Bank, the real estate arm of RABO Bank.