Catalyst partnership buys German office building for €16m

Catalyst Capital, the European real estate investment and asset management firm, has acquired a prime office building in Frankfurt, Germany, for €16 mln, reflecting a net initial yield of 5.7%.

Catalyst purchased the building at Eschersheimer Landstrasse 50 in partnership with an overseas investor targeting assets in Germany, UK and France. The vendor was Aachener Grundvermögen, a Cologne-based real estate investment company.

The 4,865 m2 building is 85% let and the two main tenants are Handelsblatt, the German business newspaper, and Towers Watson, the global professional services company. The weighted average unexpired lease term is 2.6 years.

Eschersheimer Landstrasse 50 is the second property acquisition that Catalyst has completed with its new unnamed, overseas partner. Last year they acquired Carl-Ulrich-Strasse 4, an office asset in Neu-Isenburg, an affluent town between Frankfurt’s central business district and Frankfurt Airport, for €20 mln.

Both buildings provide Catalyst with the opportunity to add value through driving rental uplifts, letting vacant space and agreeing lease extensions with existing tenants.

'Our strategy with our overseas partner is to buy well-located, grade A office buildings with value-add potential in primary cities and towns, such as Frankfurt and Neu-Isenburg,' said Kean Hird, Catalyst partner responsible for the German and Polish regions.

Catalyst’s Frankfurt-based German team has been very active over the last 12 months. As well as buying the two buildings in Neu-Isenburg and Frankfurt, Catalyst has in recent months sold a retail warehouse in Falkensee, near Berlin, to Invesco Real Estate and a supermarket in Troisdorf, near Cologne, to REWE Group, for a combined €20 mln.

Kean Hird added: 'We are taking advantage of strong conditions in the German property market. We believe this is an opportune time to sell stable assets and buy office and retail properties, where we can apply our asset management skills to add value.'

Both of the German sales came out of Catalyst’s first European fund, Catalyst European Property Fund 1, which closed in 2008. A further two sales from the fund were completed in March and May, when New Bridge Street in the City of London was acquired by The Corporation of London for a price of €35 mln and Les Ateliers du Parc, an office complex in Clichy, Paris, was acquired by Deka Immobilien for more than €155 mln.