Korean consortium buys Frankfurt skyscraper in year’s biggest deal

A South Korean consortium made up of IGIS Asset Management and Hana Financial Investment has bought the Trianon skyscraper in Germany for €670m from NorthStar Realty Europe Corp. It is the biggest deal in Germany this year.

Real estate services firm Cushman & Wakefield advised on the sale of the fully-let 45-storey skyscraper in Frankfurt on behalf of NorthStar Realty of the US. The American group bought the asset in July 2015.

The 68,000 sqm Trianon building was constructed in 1993 and is located at Mainzer Landstrasse, in the centre of Frankfurt’s banking district. It comprises 61,304sqm of office space, 4,345sqm of ancillary space and 2,788sqm residential space. It is ranked as the sixth-highest building in Frankfurt, at 186 metres.

Richard Tucker, the head of capital markets in Frankfurt at Cushman & Wakefield, said: “Trianon is perfectly positioned to not only benefit from the projected out-performance of Frankfurt rental growth, but also from the city’s appeal as a leading global financial centre.”

Argie Taylor, the head of APAC cross-border capital markets at Cushman & Wakefield, said: “The sale follows a comprehensive global marketing campaign, which saw the building generating significant interest from a broad spectrum of investors in Europe, China, Hong Kong, Singapore and South Korea.

“Our unique insight into the Korean market helped us to secure a high-quality buyer for the asset.”

Since acquiring the asset in July 2015, NorthStar said it had executed value-enhancing initiatives including leasing seven vacant floors and signing a 10-year lease with Deutsche Bundesbank, as well as obtaining a LEED Platinum certification following an extensive refurbishment programme.

The building is currently fully let and benefits from a long average weighted unexpired lease term, in excess of 6.5 years to expiry, with significant German tenants including DekaBank, Deutsche Bundesbank, and Franklin Templeton.

Jan-Willem Bastijn, the head of EMEA capital markets at Cushman & Wakefield, said: “As a landmark deal for the Frankfurt market, the sale of Trianon marks a significant achievement for Cushman & Wakefield’s capital markets team at both a local and global level.

“It is a great example of leveraging our global capital markets platform in tandem with the market-leading expertise in our German capital markets team to deliver the best result for our client on this truly international project.”

Both Hana and IGIS Asset Management have been on shopping sprees in Europe recently. IGIS, South Korea’s largest independent real estate fund manager, last month bought the Nestlé headquarters in the Spanish city of Barcelona for about €87m, while Hana paid Stg175m (€196m) for the Gallagher shopping park in Wednesbury in the UK in July, in the country’s largest retail warehouse deal of the year.