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«Tower 185» – Frankfurt skyscraper with Brexit bonus News

Saturday, September 2nd, 2017 | Economy

The sale process has been launched for the 51-storey "Tower 185" between the banking district and the trade fair, which includes tenants including Janus Henderson Investors and PricewaterhouseCoopers.
"In the middle of September we expect the first offers," says Frank Nickel, CEO of CA Immobilien Anlagen AG, in an interview with Bloomberg. "Theoretically it is possible that we will close the sale by the end of the year.
The Viennese company, which is worth around € 2.3 billion on the stock exchange, is one-third of the property after selling the remaining shares to institutional investors four years ago. At that time, the market value was reported at around EUR 500 million. All joint venture partners now agreed to the sale.
Does the Brexit provide for higher prices?
Perhaps the high interest in Frankfurt real estate due to the Brexit plays the owners in the transaction into the hands. "I'm curious to see if the Brexit will affect the selling price," says Nickel.
The building could quite possibly change its owners in the current market environment for approximately 750 million to 800 million euros, according to a Frankfurt broker for commercial real estate, which does not want to be named. He refers, among other things, to the good rental. According to the website, the rented high-rise is around 90 percent.
If the "Tower 185" is actually sold for this sum, this would be a value increase of at least 50 percent in four years.
Numerous financial services providers want to bring activities from London to Frankfurt, because Great Britain faces a withdrawal from the European Union. Deutsche Bank's most likely breakthrough scenario, for example, foresees that about 4,000 jobs will be relocated from UK to continental Europe over several years, Bloomberg reported in early August, referring to informed circles.
"In principle, the discussions surrounding the Brexit investment in Frankfurt are showing an even better light," says Fabian Klein, Managing Director and Head of Investment Germany at CBRE Group, opposite Bloomberg.
New tower is being built
Jürgen Schmid, who is head of the Frankfurt real estate investment business at Savills Immobilienberatungs-GmbH, also sees this: "The Brexit is likely to give the real estate market and the imagination a boost for rental growth in Frankfurt".
For CA Immo the sale of the "Tower 185" does not mean a withdrawal from Frankfurt. The company has just begun with the preparatory work for a tower in the Europaviertel called "One" – in the immediate vicinity of "Tower 185"
"In the middle of September, the excavators are rolling, then we are starting to build," says Nickel. "We expect the building to be completed in the beginning of 2021." The lower 14 floors are used as hotel with restaurant and conference area, the upper floors are office space.
With a share of 46 percent of total real estate assets as of June, Germany is by far the most important market for CA real estate.
With a square meter price of around 30 euros, rents in the new high-rise building, according to Nickel, will be relatively low. He wants to achieve this with a more favorable construction. "For example, we do not dig into the car park for eight floors, but build it next to the tower, dramatically saving money," he says.


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