Union Investment has acquired Degerloch Office Center (DOC) 1 and 2 at Löffelstraße 40 and 34-38 on the southern fringe of Stuttgart city centre via a forward funding deal worth €340 mln.
The acquisition will be added to the holdings of open-ended real estate fund Unilmmo: Deutschland. The vendor is Unmüssig, a developer based in Freiburg.
Alejandro Obermeyer, head of investment management DACH at Union Investment, said: 'On completion in 2023, DOC 1 and DOC 2 will be the most modern office buildings in Stuttgart’s Degerloch submarket.
'They enjoy a visible location in this established submarket with good public transport links and are therefore very well positioned to benefit from the medium-term rent growth predicted for Stuttgart, with its thriving economy.'
The DOC 1 development project involves the extensive refurbishment of an office building dating from 1989. Some 24,200 m2 of rental space will be created from basement level 1 to the third floor, with a focus on efficiency and flexible floor plates.
The property will feature an outdoor terrace for tenants on the first floor, while a 200 m2 roof terrace is also planned.
The ground floor will be home to multiple small retail units, with a fitness/wellness space and an approximately 220 m2 bistro. There will be a canteen and nursery in the basement, which benefits from full daylight. Although the property has no underground car park of its own, it has been allocated 185 parking spaces in DOC 2.
Completion of DOC 1 is scheduled for the fourth quarter of 2023. Part of the property has already been pre-let on long leases to a nursery, a fitness studio and a provider of auditing services. The building is set to receive DGNB Gold certification.
The DOC 2 development project is a new build that will provide total rental space of 22,800 m2 from basement level 3 up to the 5th floor for use as offices with terraces and storage areas.
The entire building has already been let to health insurer Hallesche Krankenversicherung. The building’s underground car park will include 158 spaces for DOC 2. Completion is scheduled for the fourth quarter of 2023. Like DOC 1, the property is due to receive DGNB Gold certification.
Union Investment was advised on legal aspects of the transaction by Clifford Chance, on tax matters by P+P Pöllath + Partners and on technical issues by Drees & Sommer.
Unmüssig was advised on legal aspects of the deal by law firm Dohle & Simon, on tax aspects by HBM Hecht Bingel Müller & Partner and on technical matters by mdbm Baumanagement. The transaction was brokered by the Stuttgart office of Colliers.
