This article is from the Australian Property Journal archive
MACQUARIE Office Trust has bought an A Grade office building in Frankfurt, Germany for €49 million euros ($A77.8 million).
The acquisition is forecast to generate an initial yield of 5.3%.
Located in Sachsenhausen, a well established inner sub-market in Frankfurt, the newly constructed building offers 11 floors of office accommodation totalling 14,356 sqm; a 1,126 sqm of space for catering and conferencing facilities and 150 car spaces.
The building is currently 83% leased to IMS Health, a provider of pharmaceutical market information, who are part of same group as a tenant at the trust’s Charter Grove property in
St Leonards, New South Wales.
IMS Health has committed to an 11 year lease expiring 2018.
MOF’s chief executive Adrian Taylor said the asset increases Macquarie Office’s exposure to major European cities while also providing potential for secure income streams.
“Frankfurt is Germany’s fifth largest city and the third largest financial centre in Europe. More recently, Frankfurt is developing into the main headquarters for the IT, communications and media sectors.
“The city is one of the top five office markets in Europe by size, and one of the top 10 most liquid European office markets in 2006,” he added.
Taylor said the trust terms have been agreed with another tenant for a further 7% of office space, and the vendor will provide Macquarie Office with a 10 year rental guarantee for all vacant space.
These activities underpin a secure income stream for a minimum 10 year period on the asset.
Prime net rents for the Sachsenhausen area are 17 Euros per sqm per month, which is a substantial discount to the average of 35 Euros per sqm per month prime rents available in the core central business district.
“This acquisition continues Macquarie Office’s strategy to diversify the portfolio to European real estate and capital markets. With a weighted average lease expiry of 10.2 years, the asset brings added income security to the portfolio through a recognised tenant,” Taylor said.
Settlement of the transaction is expected to take place by the end of first quarter 2008, and will bring the total value of the trust’s European assets to approximately €286 million euros ($A451 million).
Australian Property Journal
