BlackRock Real Assets has sold a 28,000sqm office building in Frankfurt on behalf of its European value-added strategy.
BlackRock said the Lyoner Stern office building, which was sold for an undisclosed sum, marks the second realisation of the German value-add portfolio and the third in total in the strategy.
BlackRock bought the Lyoner Stern office building in 2016.
Thomas Müller, portfolio manager within BlackRock’s European real estate business, said: “Lyoner Stern is another great success story and testament to our European investment strategy of targeting overlooked assets in the most liquid cities with the tightest occupational markets.
“With Lyoner Stern, the approach has allowed us to accelerate the business plans and lease-up and sell the buildings ahead of schedule while capturing rental growth substantially in excess of our base case.”
Wolfgang Ködel, head of Germany for real estate at BlackRock Real Assets, said: “We are very pleased to have realised another strong result for our clients.
“We identified the transformation trend of Niederrad when vacancy was starting to decline as redundant office space was starting to be converted.”
Ködel said BlackRock invested ahead of that trend, and vacancy has fallen by more than 30% since it acquired the asset in 2016 and is now around 65% below its historic peak.
“As a consequence, we benefit from the rent and price uplift in an improved market.
“We continue to look for assets in sub-markets with such irreversible structural changes across the most liquid office markets in Germany, i.e. Munich, Berlin, Frankfurt and Hamburg.”