Union Investment’s acquisition of Hamburg’s Ericus-Contor building was made at a price of about €185 mln and a 2.8% gross and 2.6% net initial yield.
Union and the building’s vendor Patrizia, who did not disclose the price, said earlier this week that they had closed the sale of the 18,900 m2 multi-let office building in the city’s HafenCity in the biggest single-asset deal in Hamburg this year.
While the initial yield, and the price of €9,700 per sq metre appears aggressive, local sources pointed out that the building is reversionary. It is 98% let to tenants including shipping companies Maersk and Hapag-Lloyd and luxury retailer Chanel at an average rent of €21 per sq m/month.
The average lease length is five years; top prime rents in Hamburg have reached €32.50 per sq m/month according to CBRE’s Q1 2020 research.
Marketing of Ericus-Contor began in January. LaSalle Investment Management and Real IS were underbidders. BNP Paribas Real Estate advised Patrizia.
One source said they believed that the price achieved represents a very slight discount to the pre-coronavirus estimated value which he put at €195 mln, representing a circa 5% discount.
The building has DGNB platinum certification and is located in a prime location at the entrance of HafenCity, which is Europe’s largest inner-city urban regeneration area.
According to Real Capital Analytics, the German investment market is so far the most resilient in Europe in the teeth of the coronavirus pandemic. RCA says that in April, deal volume across Europe crashed by two-thirds but in Germany the fall was only 25%.
