The Board of CLS has announced the exchange of contracts for three further office properties in Germany at a total consideration of €19.5 million (£13.55 million) inclusive of all costs. One building is located in Munich and two in Hamburg.
£The property known as Rüdesheimer Strasse 9, Munich is newly built having been completed in 2002, and comprises 2,587 m² (27,600 ft²) of offices and storage space together with 35 car parking spaces. The building is 100% let to three tenants with 82% of the rental income secured until October 2014 and the remainder on five year leases.
Harburger Ring 33, Hamburg comprising 3,330 m² (35,530 ft²) of offices constructed in 1993 is 100% let to the City of Hamburg until November 2013.
Merkurring 33-35, situated in a business park just north of Hamburg city centre comprises 8,262 m² (88,156 ft²) of offices and production / warehouse facilities. The building constructed in 2002, is let to York, a global heating, ventilation and air conditions manufacturer until the end of 2011.
The properties, which were purchased separately, generate an annual rent of €1,402,500 (£975,000) and were purchased on an initial yield including all costs of 7.3%.
The initial anticipated return on equity on completed loan facilities of €15.18 million (£10.55 million) for the three properties is 19.8%, whilst the cash return on equity is 15.4%.
Furthermore CLS has now completed the acquisition and financing of Adlershofer Tor, Berlin, announced in January this year. The purchase price was €39.3 million (£27.24 million) inclusive of all costs. The building comprises 19,715 m² (212,212 ft²) office and retail space with 45% of the building let to Kaufland, the German retailer and an average lease length of over 13 years.
Christian Holle of IAM has acted as consultant for CLS on all these transactions.
The value of the German portfolio of CLS (at cost price and including properties where contracts have been exchanged) now stands at €108.25 million (£75.23 million). CLS intends to make further selective acquisitions in Germany, where current yields generate attractive returns on equity on a geared basis, with potential upside in rental growth.
Executive Chairman, Sten Mortstedt, commented:
These investments offer both high initial returns and the possibility for further value enhancement in a recovering German economy. We are continuing to see good investment opportunities in Germany and anticipate further acquisitions in the future.