South Korean asset manager IGIS is believed to be working on a ‘club deal’ involving the acquisition of the Trianon Tower office building in Frankfurt on behalf of South Korean investors.
In 2017 IGIS put together a fund together with PGIM on behalf of Korean insurance company NPS and The Korean Ministry of Employment and Labor Reserve Fund. It currently owns just one building in Germany: Fleet Offices in Hamburg.
Owned by US private equity giant Colony Northstar, the Trianon Tower is one of the most iconic office towers in Germany with a total rentable area of 66,000 m2 over 47 floors. It is expected to fetch a price of between €600 and €650 mln. However, market watchers have said the price was too high which explains why it has so far failed to sell after a year on the market.
Its main tenants are Deka Bank (36,500 m2) and Deutche Bundesbank (22,300 m2). Another high-profile tenant is investment manager Franklin Templeton, which has a 10-year lease for 4,200 m2 until 2025. The weighted average lease term (WALT) is approximately 6.5 years.
The Trianon Tower is the sixth tallest office building in Germany and has a distinctive triangular shape. Constructed in 1993, it was designed by AS & P Albert Speer & Partner, Novotny Maehner Associates, HPP Hentrich-Pteschnigg & Partners and has been LEED Gold Certified since 2012.
It is believed that a number of larger transactions have been pushed forward recently in Germany due to German government plans to introduce a new transfer law which could make it more complicated or expensive to engage in share deals. 'These proposals would affect deals with big ticket sizes in particular,’ according to Jan Stadelmann, head of Savills’ Frankfurt office, and Juergen Schmid, director of the advisor’s Frankfurt investment team. ‘A transfer tax of 3.5-6.5% is quite a sizeable sum on a deal of say, €600 mln.’
The proposed transfer tax differs in percentage terms per federal state but, if introduced, would amount to 6% in Hesse where Frankfurt is located.
In mid-September, it emerged that German fund manager Commerz Real is buying Omniturm, Tishman Speyer's major mixed-use development project in Frankfurt’s central business district, on behalf of its hausInvest open-ended real estate fund. The purchase price was kept confidential, but German press reports put the deal price at nearly €700 mln.
In the same week, independent asset manager Schroders announced it is acquiring the Pollux office tower in Frankfurt from Blackstone's Officefirst property arm for a price over €220 mln while German investor and asset manager GEG bought the Garden Tower in the heart of Frankfurt’s banking district from a core-plus fund advised and managed by Tristan Capital Partners. The transaction price amounted to €275 mln.
Another large property up for sale in Frankfurt is the 155-metre high, 45,500-m2 MarienTurm project. Developed by Pecan and Aermont Capital’s €1.3 bn Perella Weinberg Real Estate Fund II, the property is partially pre-let to US investment bank Goldman Sachs but still has a large vacancy rate which, according to well-informed sources, has put off some potential buyers.
