Listed UK property investor CLS Holdings has expanded its portfolio in Germany by acquiring Connect, a 13,052 m2 multi-let office property in Cologne, for €30.5 mln excluding costs.
The purchase price reflects a net initial yield of 5.1%, while the reversionary yield is estimated to be over 6%. The property is fully let and has a WAULT of 2.2 years. It consists of an 11-storey tower and five-storey lower main building.
Connect is located in the Airport Business Park in Cologne, between the city-centre and Cologne-Bonn Airport. The property is located adjacent to the S-Bahn station Köln Frankfurter Strasse.
CLS intends to finance the acquisition initially through existing cash resources with completion expected in four-six weeks.
Cologne has a vacancy rate of around 2.5% with limited supply of new offices and a growing population, making it an attractive destination for investments, CLS said. The company purchased a 12-asset office portfolio in Germany last year, bringing its holdings in the country to around one third of the overall portfolio.
Commenting on the latest acquisition, Fredrik Widlund, CEO of CLS, said: 'This acquisition gives us an opportunity to utilise our in-house German asset and property management team to deliver value to our investors over the long-term. Cologne has been an area of interest for CLS for several years, and this transaction allows us to enter the market at an exciting time.'