Real IS consortium pays 2.7% yield for Munich office tower

A group of investors led by Real IS has bought a new Munich office tower at a yield of 2.7%, PropertyEU has learned.

Real IS paid €270 mln for the Blue Tower, a 26,000 m2 office building in the 77,650 m2 Bavaria Towers development. The German investment manager invested with BVK and one other German institutional investor.

Bavaria Towers will comprise four buildings including the completed White and Blue Towers. Developed by Van der Heyden Group and Bayern Projekt with Zurich Insurance, it is located in Bogenhausen on the city’s eastern edge, providing access to the Munich Fair where Expo Real is held every year.

Blue Tower is 91% multi-let, mainly to tech companies on 10-year leases. Colliers International was the letting agent and advised the owners on the sale.

‘It has gone for a very strong price; the tenants in this building are not global names,’ said one agent. It is believed the building’s guide price last year was €230 mln, equating to a 3.3% yield and €45 mln lower than the price that has been achieved.

A few weeks ago, Hines paid Norges Bank Investment Management approximately €390 mln to buy Lenbach Gärten in Munich on behalf of German institutional capital.

That trophy city centre property achieved a yield of between 2.5% and 2.75%, according to a person familiar with the deal. The 12-year-old, 30,000 m2 buildings are let to Apple and McKinsey. CBRE advised the vendor. Norges bought the asset five years ago for €176 mln.

In the Bavaria Towers development there are two more, smaller office buildings, the Sky and Star towers while the 15,150 m2 White Tower was prelet for 20-years to H-Hotels for a four-star Ramada Hotel and was forward sold to Swiss Life.


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