Aareal Bank this week expanded its commercial property finance portfolio to include the data centre asset class. The German lender provided a €160m loan to Goodman Group to acquire Frankfurt I Data Centre in Mörfelden-Walldorf and is acting as the arranger, facility agent and security agent for the transaction.

Christof Winkelmann, a member of Aareal Bank’s management board, said: “Frankfurt is Europe’s largest internet node, with a data transfer rate of more than 18 terabits per second. Growing digital infrastructure requirements make data centres a highly attractive asset class and an excellent add-on to our portfolio.”

According to new research from adviser CBRE, Frankfurt just grew past the 1GW mark, narrowing the gap with London, Europe’s largest market, in the process.

The Frankfurt market closed at 1.02GW in the second quarter, including 26MW of new capacity. Frankfurt, Europe’s second-largest market, is now just 114MW smaller than London, the largest market since CBRE initiated coverage of colocation data centres in 1999.

Over the past decade, the supply in Frankfurt has grown 20% per annum, on a compounded basis. The growth of Germany’s financial capital has largely been driven by hyperscalers and digital service providers whose investment has led to new developments in the metro area and expansion efforts in submarkets such as Offenbach.

Andrew Jay, head of data centre solutions, Europe at CBRE, said: “Frankfurt’s growth is remarkable given the difficulties providers are having securing the necessary power, appropriate land and the regulation that providers must consider within the city.

“Nevertheless, interest in Frankfurt remains particularly high, driven by the need to deliver digital services, as well as keeping sought after supply away from competitors.”

Also this week, L+R Hotels teamed up with Midstar to launch a dedicated investment joint venture, LR Midstar Holdings AB. The new investment platform is exclusively focused on acquiring and enhancing hospitality opportunities across the Nordic region and received initial equity commitments of €600m, with the aim to assemble a portfolio exceeding €1bn over time.

The biggest transactions this week were the €177m trade of Spencer Place in Dublin - which marks Ireland’s highest value residential investment deal so far in 2025, as well as the €173m sale of a healthcare portfolio in Italy to BNP Paribas REIM.

Assets on the market       
Asset Asset type Location Vendor Size Price (mln) Broker Key facts
The Burlian mixed London Hines NA £200 (€231) Knight Frank The sale reflects a 3.75% net initial yield.
Horseferry House office London Derwent London 162,000sqft £145 (€168) CBRE The office, originally built in the 1930s, was refurbished to become Burberry’s headquarters in 2008.
273 Rue Saint-Honoré retail Paris Oxford Properties 1,430m2 €150 NA Oxford signed a new 12-year lease with occupier Valentino last year.
Northampton Guildhall Extension mixed Northampton, UK West Northamptonshire Council 80,941sqft NA Vail Williams Vail Williams is inviting offers via informal tender for the long leasehold interest, with a new 250-year lease.

 

Recently completed loans    
Lender(s) Borrower(s) Asset(s) Loan Size (mln) Key facts
Castlelake Peach Property Entire portfolio €410 The term is three years with two one-year extension options. With the new financing, the housing company can repay €310 million of existing loans early.
Aareal Bank Goodman Group Frankfurt I Data Centre in Mörfelden-Walldorf €160 This is the first loan provided by the bank for the data centre asset class.

 

New mandates/JVs and funds on the market   
Firm Fund/mandate/JV Strategy Details
L&R Hotels Midstar Acquiring and enhancing hospitality opportunities across the Nordic region. The platform launches with an initial equity commitment of €600m.
      Plans are to build a €1bn platform over time.

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