The Bonn-based IVG Immobilien, until recently Germany’s largest real estate company until it filed for insolvency last year is back in the news over reports that it is selling two of the Frankfurt properties with which it is now most closely associated.
Various reports last week said that IVG is lining up a new attempt to sell The Squaire, the giant ship-shaped office and hotel property at Frankfurt Airport above the airport’s mainline railway station. The property has been a mill around IVG’s neck since its inception, and contributed in no small way to IVG problems with construction delays and massive cost overruns. It was completed in 2011, is two-thirds of a kilometre long, has 146,000 sqm of lettable space, including two Hilton hotels, and includes consultancy group KPMG as its main anchor tenant, but it is still not completely let.
The nine-storey Squaire is IVG’s biggest asset, with a valuation of €800m now after construction costs of more than €1bn. The insolvent IVG, which is now owned by its creditors after wiping out the shareholders, is now restructuring €3.2bn of debt after the deal with its bondholders allowed it to write off €2.2bn before de-listing. It owns about €4bn of office property assets across Europe, while its institutional funds division manages €12bn of real estate for hundreds of investors.
While IVG seeks a buyer for its institutional funds division, it is also clearly looking to lighten up here as well on its heftiest assets. Next up on the block for sale, according to reports in Frankfurt, is the landmark Silberturm tower near the Frankfurt main railway station.
The 32-storey, 166m-tall tower with 33,400 sqm of lettable space was once Germany’s tallest building, and served as the headquarters of the Dresdner Bank. Following the bank’s absorption into Commerzbank, the building was renovated and leased to the German railway operator Deutsche Bundesbahn on a 15-year lease, where it houses 2,000 employees. IVG Funds bought the building in 2011 from Commerzbank. The price IVG hopes to get is €450m, according to reports.
