Kingstone snaps up Karlsruhe office property

Owner-managed real estate investment group Kingstone Real Estate has acquired an office property in the southwestern German city of Karlsruhe from a project company of GIEAG Immobilien as part of an asset deal.

Financial details were not disclosed, but the price is understood to be in the mid double-digit million range.

The property was acquired for the special real estate fund Kingstone Wachstumsregionen Süddeutschland (KWS).

The property at Philipp-Reis-Strasse 4 is leased on a long-term basis to the Federal Agency for Real Estate Tasks (BIMA) and is used by the main customs office of the city of Karlsruhe.

The single-tenant property with six upper floors was built in 1978 and extensively refurbished in 2020. The building comprises a lettable area of around 9,400 m2. In addition, the 3,700 m2 property includes 43 outdoor and 20 garage parking spaces for cars.

The current lease for the property has a remaining term of 14 years plus an option to extend.

Tim Schomberg, managing partner and CEO of Kingstone Real Estate, said: 'With this transaction, we are optimising the risk profile of KWS. The contract with a state-owned tenant generates reliable income for our investors. The very good building fabric also underlines the long-term nature of the investment.'

Philip Greilich, head of transactions commercial Germany at Kingstone Investment Management, added: 'With this transaction, we are securing a high-quality property in a central location in Karlsruhe for our investors.

'In addition to the excellent transport connections, the tenant also benefits from the direct proximity to generous green spaces. The refurbishment of the property and also the surrounding development activity will also extend the modern cityscape around Citypark towards the city centre.'

The KWS special fund invests primarily in core office properties and commercial real estate in selected growth regions in southern Germany and is aimed at institutional investors. The special AIF launched in the summer of 2019 is already largely fully invested.

Kingstone Real Estate was advised on the transaction by Pinsent Masons (legal and tax due diligence) and Drees & Sommer (technical due diligence). For GIEAG Immobilien, Waigel Rechtsanwälte Partnergesellschaft provided legal advice, while Deloitte Wirtschaftsprüfungsgesellschaft was tax advisor.


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