TLG Immobilien expands turf with €160m Frankfurt office buy

In its first move outside its traditional territory of Berlin and the eastern German states, the listed TLG Immobilien AG has invested €160m in two office properties in Frankfurt am Main from a US investor.

The 31,500-sqm Campus Carré in Frankfurt-Niederrad and the 26,700 sqm Olof-Palme-Straße 35 in Frankfurt’s Mertonviertel were bought for €85.7m and €74.3m, respectively. The Campus Carré generates around €5.5m a year in rent and is 99% occupied, with tenants including Hochtief Solutions, Techniker Krankenkasse and Steigenberger. Olof-Palme-Straße 35 is 100% let to Air Liquide and generates €4.3m in annual rent.

The firm, with 120 employees, has typically focused on the office markets of Berlin, Dresden, Leipzig and Rostock. Since its stock market flotation in 2014, TLG Immobilien has added a further €500m of assets to bring its portfolio to a valuation of more than €2bn of offices, retail and hotel assets.

According to CEO Niclas Karoff, "For us, this transaction is the strategic start of our move into the rest of Germany. With this acquisition in Frankfurt we are starting off with exceptionally well-positioned properties in each of the micro-markets. From this position we intend to systematically expand our portfolio in the promising Rhine-Main area as well as in other locations in Germany."

"Our business model will not change, meaning that our activities in the future will still be determined by our local proximity to our customers and markets", he added.

TLG had earlier in October colosed on two whopping centres in western Dresden for €24.3m including costs. The assets are local neighbourhood shopping centre Sachsen Forum, which was built in 1996 and has a lettable area of around 11,700 sqm; and the directly neighbouring Fachmarktzentrum Merianplatz, which has a lettable area of around 3,000 sqm.

Both properties are situated in the district of Gorbitz, in the heart of one of the largest residential areas in Dresden which is home to around 20,000 people. The rental agreements for both properties generate around €1.7m per annum.