AEW acquires Baseler Palais office building in Frankfurt

AEW has acquired Baseler Palais, an office building in Frankfurt Am Main, Germany, on behalf of AEW Europe Value Investors II (EVI II).

The transaction is the Fund’s first in Frankfurt and the second in Germany, following the acquisition of the Accor Building in Munich last year, and increases EVI II’s assets under management to over EUR230 million with nine assets in the portfolio.

 
The Fund raised over EUR300 million of equity commitments at first close and is targeting total equity of approximately EUR500 million which will provide a total investment capacity of circa EUR1 billion.
 
The seven-storey building, which comprises c5,300 sq m of lettable space, is 50 per cent let with a WALT of c4.6 years. The main tenant is Leibniz-Institut Hessische Stiftung Friedens-und Konfliktforschung (HSFK), one of the leading peace research institutes in Europe. The asset offers asset management and refurbishment potential in the medium term including to lease up vacant space across the building.
 
Located in one of Frankfurt’s most dynamic submarkets, Baseler Palais is ideally connected and is situated just one minute away from Frankfurt Central Station, which offers links to the city centre, the Rhine-Main region and the rest of Europe, as well as being in close proximity to the Central Banking District. Frankfurt International Airport is also 12 minutes by train.
 
Carsten Czarnetzki, Fund Manager of EVI II at AEW, says: “The asset presents an opportunity for our team to implement short to medium term asset management and refurbishment measurements, leveraging our expertise. This acquisition is also perfectly aligned with the investment strategy of the Fund and our focus is to continue to invest the capital raised for the Fund in top cities across Europe, amongst which Frankfurt is one.”
 
Tobias Schnurer, Director Investment at AEW, adds: “This acquisition presents an opportunity to acquire a well located office building in one of Germany’s strongest office markets and a major financial centre, which has benefited from the aftermath of Brexit. With extremely low vacancy across the city’s office stock and strong occupier demand, rents are continuing to grow and we expect this investment to be well placed to capitalise on this trend.”
 
AEW was advised by Ashurst LLP, Drees & Sommer and Nova-Ambiente. GSK Stockmann and JLL acted for the vendor.