IVG Immobilien has withdrawn its flagship development The Squaire at Frankfurt Airport from sale after bids from international investors fell short of its valuation of €700 mln.
IVG Immobilien has withdrawn its flagship development The Squaire at Frankfurt Airport from sale after bids from international investors fell short of its valuation of €700 mln.
At least three bidders – Blackstone Group, BlackRock and Tishman Speyer – were believed to be in the running to buy the distinctive ship-like building, which IVG built for €1 bn in 2011. An Asian and a Middle Eastern fund were also reported to have expressed interest in the sale.
IVG said it had terminated the sale process after securing a refinancing package with Bank of America Merrill Lynch worth around €470 mln over a five-year term.
‘The offers we received did not match our valuation of this property,’ said Ralf Jung, CEO of IVG Immobilien. ‘At the same time the refinancing obtained makes it commercially attractive for us to keep The Squaire in our portfolio. It shows a commercial viability well above total portfolio’s average.’
IVG Immobilien approached potential buyers for The Squaire in September as part of a restructuring plan that followed the company’s insolvency in 2013. Industry analysts expected the sale to be concluded in December for a price of around €650 mln.
The company decided that the bids on the table were less attractive than the option of refinancing the building. ‘The refinancing terms ensure that, with its current letting levels, The Squaire will deliver an earnings contribution in the double-digit millions,’ said Fabian John, head of corporate finance.
The Squaire, which sits on top of Frankfurt Airport’s railway station, contains 146,000 m2 of space and has tenants including Lufthansa, KMPG, hotels and retailers, but is not fully let.
In October IVG agreed two new loans worth €1.5 bn with Deutsche Bank in order to refinance the company’s outstanding bank loans.
IVG Immobilien AG was supported in the refinancing negotiations by legal advisor Clifford Chance and Rothschild as financial advisor.