Frankfurt's Tower 185 to hit the market in expected record sale

Austrian property group CA Immo is gearing up to put Tower 185 in Frankfurt on the market next month for around  €800m, in what is expected to be one of the biggest single office sales in German history, according to those who track the market.

The 100,400 sqm metre office tower is one of the biggest offices in the country. However, it is not the first time it has come to market. In 2013, CA Immo sold a 66% stake in the property to the German pension fund for auditors and chartered accountants, the Versorgungswerk der Wirtschaftsprüfer und der vereidigten Buchprüfer (WPV) and PPG, which administers pensions for PriceWaterhouseCoopers Germany. All three parties are expected to sell their stakes when the building comes to market in May, according to market sources.

If CA Immo does manage to sell Tower 185 for €800m, that would represent a price hike of 60% in less than four years.

‘It’s certainly quite ambitious,’ said one Frankfurt-based analyst who asked not to be identified. ‘It will be pretty challenging to sell because of its size. However, the vacancy rate now is lower than it was then and I expect that they have priced in rental growth in anticipation of the so-called “Brexit effect”. There’s nothing else of this size on the market today, so it could appeal to Asian or US buyers looking to invest a big chunk at once.’

Germany’s status as a safe haven has been cemented in wake of the Brexit. Indeed, for the first time, the overall deal volume in Germany is expected to surpass that of the UK this year. The first quarter already got off to an impressive start, with €12.7bn of real estate deals transacted in Germany in the year to 10th April, compared to €10.3b in the UK, according to Real Capital Analytics.

CA Immo and JLL declined to comment. The WPV and PPG could not be reached for comment.