The GEG German Estate Group, privately-held by the domestic Deutsche Immobilien Chancen group and US-based investor KKR, said it has acquired the Japan Center in Frankfurt CBD from Commerz Real for a total investment volume of €280m.
Built in 1996 by the Berlin-based architect Joachim Ganz, Japan Center offers 29,000 sqm of leasable space spread over 28 storeys and is fully let under long-term contracts, GEG said. Commerz Real, the asset management division of Commerzbank, acquired the building in 2002 for its open-ended real estate fund hausInvest and has technically modernised it in the past 15 months.
"With the acquisition of the Japan Center we are supplementing our real estate portfolio in the heart of Frankfurt with an additional architectural icon," said GEG CEO Ulrich Höller in a release. "We maintain a significant number of investment projects in Frankfurt’s central banking district, and intend to benefit from their positive developments."
Commerz Real Chairman Andreas Muschter added: "We are in the process of optimising our portfolio from a strategic stance, and have utilised the strong demand for premium properties in 1A locations to attain a very good result for our investors. We have fulfilled the prerequisites for achieving this added value in the past 18 months with the repositioning of the property and a complete change in the tenant mix through to full occupation."
GEG was founded in 2015 by DIC - which also controls the Frankfurt-based listed DIC Asset, of which Höller was formerly CEO - and KKR Kohlberg, Kravis Roberts. The latter has made a strong push into German property over the past three years, mostly together with local partners. Now owning around €2.3bn of commercial property, GEG strategy focuses on institutional business, opportunistic investments and property developments. In the Japan Center transaction, it said BNP Paribas Real Estate, Noerr LLP, SammlerUsinger and CBRE Preuss Valteq provided consulting services.
BIE COMMENT: GEG has been quite successful in the last three years in amassing investment properties, many of them sold into the portfolio after development by the DIC Asset affiliate. Among these are the IBC Campus and luxury hotel Villa Kennedy in Frankfurt, the Sapporobogen office building in Munich, and project developments such as the MainTor urban quarter and the Global Tower in Frankfurt, the Opera Offices in Hamburg and the Junges Quartier Obersendling complex in Munich.