Peakside buys Fernmeldeamt in Hamburg from ex-Wölbern Fund

European private equity firm Peakside has bought a landmark building in Hamburg from the closed real estate fund Deutschland 01, originally established by Wölbern Invest.

Peakside Real Estate Fund II bought the neogothic Fernsprechamt Schlüterstrasse in the Rotherbaum district for a price thought to be between €60m and €70m. The 50,000 sqm listed building was built in 1907 for Deutsche Telekom and is the largest single standing asset in Hamburg's Rotherbaum district.

The sale of the historic property follows the takeover of the distressed Wölbern fund by Richard Neff in October 2013 and the transferral of its administration to Hamburg-based Nordcapital. Wölbern filed for insolvency in 2013 following the arrest of its founder and head Heinrich Maria Schulte on suspicion of embezzlement. Schulte was subsequently sentenced to 8.5 years’ imprisonment for embezzlement of more than €147m of funds which the company managed on behalf of more than 30,000 investors.

Nordcapital successfully removed the asset’s maintenance backlog and increased its value to investors by leasing 5,000 sqm, or 10% of its total space. New tenants include Deutsche Telekom, Deutsche Post and the University of Hamburg.

"For the investors in the former Wölbern funds, the result represents a successful sale and a good result overcoming all the initial difficulties from 2003," said Neff.

Peakside aims to enhance the property by capitalising on its prime location near the University of Hamburg-Rotherbaum and the property's distinctive design. USP Projekte, located in Munich and a long-time development and cooperation partner of Peakside, will act as project manager.

Boris Schran, managing partner of Peakside Capital, said: "The current use of the building has changed in the recent past as technological advances have altered the use of it by Deutsche Telekom. Today tenants require more contemporary space suitable for today’s requirements, a strategy we intend to pursue."

The independent and owner-led Peakside, manages property investments with a total volume of €1.8bn, mainly in Germany and the CEE countries. The Nordcapital Group is owned by E.R Capital Holding, and finances and manages investments in the shipping, real estate, energy and private equity sectors. Since its inception in 1992, the firm has realised an investment volume over €6.8bn, and has more than 60,000 investors across 140 of its funds.