Investcorp purchases Frankfurt office from Blackrock

Global alternative investments manager Investcorp has purchased a 28,000 m2 office building located in Frankfurt from BlackRock Real Assets.

Financial details were not disclosed.

'Over the past year, Investcorp has been looking for good properties within the major markets in Germany,' said Neil Hasson, managing director - head of Investcorp European Real Estate.

'As part of that strategy, we are delighted to announce the acquisition of Lyoner Stern. The building is situated in a well-established submarket of Frankfurt which, in recent years, has transitioned from a pure office location to a mixed-use area with growing residential and entertainment components,' Hasson added.

The deal for the property marks the second sale from Blackrock's German value-add portfolio, the vendor said, and the third from within the European strategy.

Thomas Müller, portfolio manager for European real estate at BlackRock, said: 'The Lyoner Stern is yet another success story from our European investment strategy. We focus on 'overlooked' properties in cities with tight rental markets and good liquidity. As a result, like the Lyoner Stern, we are able to implement business plans faster and rent and sell properties ahead of schedule.'

Situated at the S-Bahn station in Frankfurt's Niederrad submarket, the asset is undergoing the final phase of a repositioning and refurbishment drive.

Wolfgang Ködel, head of German real estate business at BlackRock Real Assets, said that many offices had been converted into residential space in the area, creating value in the property. 'We observed the change in Niederrad at an early stage, as vacancies began to decline as a result of office conversions, and invested there in good time. Since then, vacancies have fallen by about 30%. Today they are about 65% below their historic highs. This allowed our investors to benefit from the increase in prices and rents in this improved market environment.'

Ködel added: 'We are still looking for properties in submarkets that are undergoing permanent structural change and are among the most liquid investment locations. These include Munich, Berlin, Frankfurt and Hamburg.'

The acquisition represents Investcorp’s third real estate investment in Germany in the past 12 months.

Montano Asset Management, which advised Investcorp, will serve as asset manager for the property.

Clifford Chance, CBRE Preuss Valteq and JLL advised the seller.


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