Austrian listed CA Immo said it has sold its largest single investment asset, Tower 185 in Frankfurt, to the Deka savings bank group for a total €775m, almost €300m over the cost of construction. CA's one-third stake brings in net cash of some €150m.
CA developed the tower in in 2011 for some €480m, and had a book value on its stake at €237m. Current occupancy of Tower 185 is around 90% after CA early on gained the global financial adviser PwC as the main lessee for more than 60% of the 102,000 sqm space. Alongside a PwC partners pension fund, WPI Fonds SCS-Fis and a second vehicle, PwC in 2013 bought a stake of around two-thirds in the tower, which has become a prominent landmark at the front of the European Quarter (Europaviertel) close to the Frankfurt trade fair.
Deka said separately that the property will be incorporated pro rata into Deka's open-ended real estate funds Deka-ImmobilienEuropa, WestInvest InterSelect, Deka-ImmobilienGlobal and the WestInvest ImmoValue investment fund designed for institutional investors.
CA Immo CEO Frank Nickel said: "This sale allows us to benefit from the current ideal environment in the German transaction market and at the same time reduce minority shareholdings in our portfolio in line with our strategy. Due to its strong fundamentals and perspectives, Germany remains our most important core market and a strong growth segment for CA Immo."
CA holds around €1.3bn in assets in Germany at a median occupancy rate of 96% and has a development volume in the market of around €1bn. In addition it holds land reserves currently assessed at €247m in value. Nickel added that the liquid funds released from the Tower 185 sale will be reinvested in its project pipeline which includes the ONE office and hotel high-rise building started several months ago in the immediate vicinity - with a planned investment volume of €330m.
The transaction is expected to be closed, subject to standard conditions precedent, in the first quarter of 2018. For the seller, JLL acted as broker for joint marketing of the transaction; legal advice was provided by Clifford Chance ; PwC and KPMG acted as tax advisors for the transaction. Transaction advice for the buyer was provided by GSK Stockmann and Ernst & Young, and CBRE and Drees & Sommer as advisers.
Drooms has accompanied the sale of the 200m high Tower 185 by providing the Drooms NXG virtual dataroom for the online due diligence process.
Since 2008, CA Immo has completed in-house project developments in Germany covering a volume of around €1.8bn - for the largest part centrally located state-of-the-art office properties in Berlin, Munich and Frankfurt.