OverseasInvestments: The Irish wealth management company Custom House Capital and Cork-based intermediaries, HLB Financial Services Ltd, has paid €27.6 million for an office investment in Frankfurt, Germany.
The transaction, which will show a gross yield of 6.67 per cent, will be offered exclusively to clients of HLB Financial Services Ltd either through direct lump sum investment or pension contributions.
Custom House Capital was advised by Knight Frank on the acquisition of the BICC Tower which is about 6kms east of Frankfurt city centre on the Hanauer Landstrasse in the Ostend district. The area is easily accessible to the centre of Frankfurt and the wider region via two motorways - it has been chosen by the European Central Bank as the location for its new headquarters.
BICC Tower comprises three interconnecting buildings: a 15-floor main office block; a four-storey office building; and a four-storey car-park. The office area extends to 10,309sq m (110,965sq ft) and there are 294 car-parking spaces.
The property is 92 per cent let with a two-year rental guarantee on vacant space. When it is fully let, the building will generate an annual rent roll of €1,647,034, corresponding to an average of €160 per sq m (€15 per sq ft) per annum. Tenants include O2, E-Plus and Emerson.
Harry Cassidy, chief executive of Custom House Capital, says that the purchase price was based off a base rent on the vacant space so that any leases signed in the future in excess of this level would benefit the investor. He said the net initial yield of 5.98 per cent compares very favourably to yields achievable elsewhere in Germany and Europe.
Custom House Capital manages over €1.25 billion of client funds in equities, bonds and commercial property. About 80 per cent of its investment portfolio is in property.
