Given rising interest rates in Germany and other European countries, it is little wonder Italian investor Generali wanted to forward fix its interest rate with lender Deka to acquire a central Frankfurt office block.
Headline interest rates are at 2.5% in Germany having been at 0.5% in the summer when news first surfaced that Generali had agreed to acquire the K26 tower in the city's banking district from The Blackstone Group.
Confirmation of the deal has only recently been given, with Generali Europe Income Holding, managed by General, confirming itself as the buyer of the 11,496 m2 complex built in 2004.
On Wednesday, DekaBank said it was the lender that financed the purchase of the asset, previously reported to have been acquired at a circa 3% yield.
DekaBank said it had provided a seven-year loan for Generali to acquire the multi-tenant structure.
Amar Latif who heads the German lending business for DekaBank said: ‘Timing was crucial for this financing given the market volatility. Therefore, we provided a forward fixing to the borrower to manage its interest rate risk.’
‘The combination of the low leverage, good fundamentals for K26 and quality sponsor fitted in well with the bank’s lending profile.’
It is the first time DekaBank has lent to Generali for a real estate transaction in Germany.
Law firm Clifford Chance said it had advised Generali on the acquisition, adding that in May the law firm had advised Generali on the purchase of another office and commercial property in Frankfurt, called the 10tral.
