Deka Immobilien has emerged victorious in the race to acquire Tower 185 in Frankfurt, as predicted in October by EuroProperty, PropertyEU’s weekly publication.
Deka, the German real estate fund manager, confirmed on 30 November that it had exchanged contracts to acquire the landmark office skyscraper for about €775 mln.
The investment volume makes this one of the largest single-asset real estate deals ever in Germany.
The crown for the top single-asset deal in German history was claimed by Ontario Municipal Employees Retirement System (OMERS) of Canada in October when it completed the acquisition of the Sony Center in Berlin for €1.1 bn. That acquisition from Korea’s National Pension Service (NPS) had been anticipated by EuroProperty earlier in 2017.
Tower 185
Similarly, the market has been awaiting the sale of Tower 185 for some time, keen to learn who would scoop the prize. EuroProperty broke the story in October that Deka was poised to clinch the deal.
At 100,400 m2 and 50 floors, Tower 185 is the fourth tallest skyscraper in Germany and is largely let to PWC which occupies 71,000 m2 of the building. CA Immo owns a 33% stake in the property. The remainder is owned by a pair of German pension funds following a deal struck in 2013 that valued the building at €500 mln.
The vendors are Vienna-listed office landlord CA Immo, WPI Fonds SCS-Fis, Fagas Asset and an additional pension fund company. Ownership of the property will be shared by the open-ended real estate funds Deka-ImmobilienEuropa, WestInvest InterSelect and Deka-ImmobilienGlobal, as well as the WestInvest ImmoValue fund, an investment vehicle focussed upon institutional investors.
'The acquisition of Tower 185 is one of the largest transactions carried out in Germany in 2017,’ said Deka Immobilien’s Victor Stoltenburg. 'This purchase allows us to acquire a high quality and exceptionally well-specified property within one of the most desirable real estate markets in Europe.'
Frank Nickel, CEO of CA Immo: 'This sale allows us to benefit from the currently ideal framework conditions in the German transaction market and, at the same time, reduce minority shareholdings in our portfolio in line with our strategy.
'Due to its strong fundamentals and perspective, Germany stays most important core market and strong growth segment of CA Immo. Liquid funds that are released in the process will be reinvested in our well stocked project pipeline – including the development of the ONE office and hotel high-rise building with a planned investment volume of approx. €330 mln. Construction of ONE was started several months ago in the immediate vicinity of Tower 185 and the Messe Frankfurt trade fair.'
The transaction will be closed subject to standard conditions precedent and is expected to take place early in the first quarter of 2018.
The building has received Leadership in Energy and Environmental Design (LEED) Gold certification as well as DGNB Gold certification for sustainable construction.
The buyer was advised on the acquisition by GSK Stockmann and Ernst & Young, additional advice was provided by CBRE and Drees & Sommer. For the seller, JLL acted as broker for joint marketing of the transaction, legal advice was provided by Clifford Chance; PwC and KPMG acted as tax advisors for the transaction.