A string of US investors are believed to be in the running for the Squaire in Frankfurt, PropertyEU has learned.
A string of US investors are believed to be in the running for the Squaire in Frankfurt, PropertyEU has learned.
Several bids have now been submitted, according to those who track the market, with a sale expected to go through by the year-end. The ship-like development, which has a retail component, was built by IVG Immobilien for €1 bn in 2011. However, the company has run into difficulty in recent years due to waning demand for offices during the financial crisis.
Blackstone Group, BlackRock and Tishman Speyer are all believed to have bid and Asian funds are also believed to be in the running. IVG is allegedly seeking €700 mln from the sale, although industry insiders have said that it might go for closer to €650 mln.
So far, there have been around €4.5 bn of deals in Frankfurt this year, which could rise to around €6 bn if some big deals like the Squaire go through before the year-end. Nonetheless, demand continues to outstrip supply, according to Brian Tucker, head of German shopping centre investment at C&W. ‘There is so much liquidity chasing retail opportunities and just not enough product. It could become even more extreme next year. Even if some of the funds liquidate assets, I don’t think there’ll be enough product to satisfy investor demand.’
Investors are flocking to Germany’s retail sector because it remains robust, despite the country’s low economic growth of late. ‘As long as unemployment remains low, people will continue to spend,’ said Markus Schmitt-Habersack, chairman of investment in Germany at C&W. (Germany’s unemployment rate is just 5%, compared to a European Union average of 10.5%)