GEG's €400m buy of IBC is Germany's biggest deal this year

In the largest single German property deal so far this year, the Frankfurt-based German Estate Group (GEG) bought the landmark property IBC International Business Campus in Frankfurt for €400m in an off-market transaction. Property lender Berlin Hyp provided the financing.

The seller was the US-based RFR Holding, which had bought the complex in November 2014 from Canada's Ivanhoé Cambridge for €300m. It had subsequently invested millions in further capex to improve the asset, while signing several new lease agreements and renewals with tenants.

The property, built for Deutsche Bank in 2003 by Köhler Architekten, consists of three building complexes at Theodor-Heuss-Allee 70-74 in the Bockenheim district beside the Frankfurt Fair, and extends over a gross lettable area of 84,000m. One of the buildings is a 112-metre high-rise tower, and the whole complex is certified with LEED gold status. The tenants include Deutsche Bank, Degussa Bank, Universal Investment and KfW on long-term leases, with a WALT of about ten years.

The transaction brings the total amount invested by GEG since its foundation in early 2015 to over €640m. In addition, the company - which is jointly owned by US private equity giant KKR and Frankfurt-based private equity manager DIC Asset - has more than €1bn in property developments under management, including the MainTor scheme in Frankfurt, the Opera Offices in Hamburg, and Junges Quartier Obersendling in Munich. GEG's approach is to invest both its own equity capital along with third-party investor funds.

According to Ulrich Höller, CEO of GEG,"With the IBC, we've bought an attractive premium building of campus character in a contested market. The outstanding competitive position of the IBC will ensure a permanently high occupancy rate and stable dividend yields."