Junghof Plaza in Frankfurt changes hands for €400m

Patrizia Immobilien subsidiary TRIUVA, has agreed the forward purchase of Junghof Plaza, a 33,000sqm, mixed-use property in the centre of Frankfurt, for about €400m. The property was bought on behalf of a large German pension scheme from a joint venture between PGIM Real Estate, an unnamed institutional investor and FGI Frankfurter Gewerbeimmobilien. The price paid was a 30-times multiple of annual rent.

Philipp Schaper, group head of transactions at Patrizia, said: “The Junghof Plaza will create a first-class landmark asset and a new destination within Frankfurt’s city centre. Due to the outstanding location, we are convinced that we can realise significant increases in value for our client.”

Located on Junghofstrasse, in the banking quarter of Frankfurt’s central business district, PGIM and FGI Frankfurter Gewerbeimmobilien Junghof had bought the former commercial centre with an institutional investor in 2016 for €180m from a portfolio of Commerz Real’s fund Hausinvest.

Junghof will be redeveloped into modern office space featuring two inner courtyards, retail space with food and beverage outlets, and hotel space. The property is more than 60% pre-let to tenants that include Clifford Chance, Ruby Hotels and gastro outlet L’Osteria. Demolition works have already begun, with construction due to commence shortly. Completion is scheduled for late 2019.

Sebastiano Ferrante, head of Germany and Italy for PGIM Real Estate, said: “Having acquired Junghof as a vacant and partially obsolete building, we are delighted with the progression of this major project in Frankfurt’s commercial business district. In addition to pre-leasing the project to prime tenants, one of our key objectives was to identify a reliable and reputable purchaser to further the execution of the project. We believe we have secured an ideal partner in Triuva on this forward sale.”

The Augsburg-based Patrizia has been engaged with a large-scale cost reduction programme, particularly in its more recent digestion of acquisitions SPI, Triuva and Rockspring in fairly quick succession. Speedy results mean that it is raising its full-year forecast for its operating result to €100m-€110m, up from its earlier estimate of €85-100m. Earnings from operations in H1 came to €72.5m, a doubling of results last year, largely due to sales from its portfolio and from co-investments.