Cologne-based Art-Invest Real Estate said it will seek more assets in Austria after its first purchase there of Vienna’s Millennium Tower on the banks of the Danube for a German pension fund. Reports say the entry yield was above 3.7%, making the deal worth around €200m.
The purchase was made for a German Special Fund set up by AIRE for Cologne’s Rheinische Versorgungskassen, and the sellers are Austrian developer CC Real and a property fund managed by Morgan Stanley. Though the purchase price was not released, Austrian real estate portal Immoflash Today reported that the transaction, “was comparatively cheap for the acquiror, with the yield in any case very clearly above the current rate for such trophy properties on the Vienna market of 3.5% to 3.7%”.
Situated northeast of the Vienna city centre, the complex of the tower and the connected Millennium City shopping mall opened in 1999. At a height of 202 m. and with 50 floors, the tower is Austria’s tallest office building, offering 38,500 sqm of office space and currently renting at floor rates of up to €18 sqm. CC Real, MS and a sovereign wealth fund acquired the complex for €315m in 2014, below the price paid by previous owner MPC in 2003 of €360m. Hamburg’s giant mall owner and operator ECE was reported to be interested in acquiring the entire property in summer 2016, but did not go ahead with the transaction which Bloomberg said was being offered at €550m.
Art-Invest MD Ferdinand Spies noted in a release that the acquisition of the Millennium Tower now takes the group into Austria for the first time, “opening up additional investment opportunities for our investors in the long term.” He added: “Our investment activities will concentrate on the metropolis of Vienna with the focus on office buildings, the retail trade and hotels with all their risk-return profiles. We will also be looking at attractive locations like Salzburg and Innsbruck.”
Miguel Freund, Deputy Managing Director of Rheinische Versorgungskassen, added: “Vienna is a stable, promising investment location for us. We are delighted to be able to acquire such an outstanding building in the growing metropolis of Vienna with Art-Invest.” Although the sellers are also reported to be seeking buyers for the shopping mall component, Freund told Immoflash Today that this is not of interest to RV at the present time.
AIRE already operates or has applied for licenses for 13 German Special Funds on behalf of institutional investors such as pension funds and foundations. Specialising in properties with added-value potential in good major city locations, the focus is German and Austrian metropolitan regions.