HypoVereinsbank finances Frankfurt skyscraper with $250m loan

The German bank has written the 32% LTV facility, syndicating €100m to ING.

German lender HypoVereinsbank, part of Unicredit Group, has written a €250 million loan to fund the acquisition of Tower 185, Frankfurt’s largest office building.

The bank has syndicated €100 million to ING Bank, and it has no intention to syndicate further, a spokesman told Real Estate Capital.

The building was acquired in November last year by Deka Immobilien, the real estate investment arm of Germany’s municipally owned savings banks, for €775 million. The purchase price implies a loan-to-value ratio of around 32 percent.

Deka Immobilien bought the office skyscraper from Vienna-listed investor and developer CA Immo, Fagas Asset and an additional pension fund.

The property, the fourth tallest office building in Germany, was completed in 2011 and has more than 100,000 square metres of leasable space and 552 parking spaces. It is leased to more than 20 tenants with international interests under long-term leases, with PwC occupying more than 60 percent of the space.

“This purchase allows us to acquire a high quality and exceptionally well-specified property within one of the most desirable real estate markets in Europe,” said Victor Stoltenburg, head of acquisitions and sales in Germany at Deka Immobilien, at the time of the purchase. Stoltenburg said the transaction was one of the largest deals carried out in Germany in 2017.

Last year, real estate investment volumes on the German commercial property market amounted to around €56.8 billion, according to global property consultancy JLL. Transaction volumes in 2017 exceeded the previous record in 2015 by €1.7 billion. Compared with 2016, this represents an increase of 7 percent.

“[This is] a remarkable result, considering the widely reported supply shortage and increased prices,” JLL noted, adding that scarcity of assets was particularly evident in the office property segment.

Stock of office space in Frankfurt totals 11.57 million square metres, with take-up of 710,000 square metres in 2017, according to Colliers International. Data from the property agency put prime office yield in Frankfurt at 3.3 percent.