Scarborough Continental Partners, the €585m (£400m) joint venture between Kevin McCabe’s Scarborough Property Holdings and Bank of Scotland Corporate Europe, has acquired a portfolio of German properties for ‘in excess of’ €300m (£208m)

The portfolio of business park, warehousing and light industrial assets has been bought from IVG Immobilien, Germany’s largest quoted property company. The net initial yield is ‘significantly in excess of’ 7%.

The sale, handled by Cushman & Wakefield Corporate Finance in Frankfurt, was on a two-stage open-tender basis.

Teesland IOG, the operating company of fund manager Teesland, advised Scarborough Capital Partners on the acquisition and will handle the asset management in conjunction with IVG.

David Seddon, European chief investment officer of Teesland IOG, said: ‘There are a number of very good upgrading and repositioning opportunities within the portfolio, as well as opportunities to improve terms as leases come to an end.’

The portfolio comprises 29 properties, developed by IVG over the last 10-15 years, which are mainly in Hamburg, Munich, Dusseldorf and Nuremberg. It has a total area of 2.84m sq ft (263,842 sq m) and a vacancy rate of around 9%.

Tenants include Nokia, Escada, Eli Lilly, Ecolab, Hermes Logistics and Deutsche Post.

‘We will keep an open mind as to an exit strategy, although there is the possibility over time of using Teesland’s expertise to create a German recovery fund to which these assets could be transferred,’ said McCabe.