European real estate private equity firm Peakside Capital and US private equity business Madison International Realty have acquired a leasehold interest in Frankfurt Airport Center I (FAC I) from UBS Real Estate on behalf of Publikums-AIF UBS Euroinvest Immobilien.

fac 1

Fac 1

Financial details were not disclosed.

FAC I, which comprises more than 48,000 m2 of offices and 182 parking spaces, has direct access to Frankfurt International Airport's Terminal 1. The building is currently let to tenants including Lufthansa, Fraport and the Airport Club.

Ahead of the transaction, the joint venture parties extended the fixed term of the leasehold from 2060 until 2090. According to Peakside, the current vacancy allows for strategic repositioning of the building with first lettings already achieved.

'Having secured this landmark site and successfully extended the leasehold, now the work begins to significantly enhance the asset,' commented Boris Schran, managing partner of Peakside Capital. 'This irreplaceable asset is in one of the best connected locations in Germany and has the potential for us to apply our proven asset management capabilities in the dynamic and thriving Frankfurt office market.'

Peakside Capital’s investment was through Peakside Real Estate Fund II (PREF II), its Germany-focused value-add and opportunistic fund which is now fully committed. Following the successful deployment of PREF II, Peakside Capital is currently fund raising for PREF III, which it said would adopt the same investment strategy.

'This is a significant transaction for Madison as it has allowed us to acquire partial ownership of a property in an irreplaceable prime location in one of our target markets,' said Matthias Cordier, Madison's head of investment Germany. 'We are excited to enter into a new partnership with such a reputable firm and look forward to create further value in repositioning the property.'

Peakside, which is responsible for the operational management of FAC I, has employed Frankfurt-based ERWE Real Estate GmbH as project manager overseeing the refurbishment of the building. Fantastic Fox Capital Advisors GmbH has been hired to manage the letting of the office and retail space.

The buyer was advised by CBRE, Clifford Chance and by Hauck Schuchardt. Senior debt financing was provided by HSH Nordbank.