Godewind Immobilien has acquired an office property in the greater Munich area for a net price of €30.5m or €1,621 per m² as part of an asset deal. The asset is situated in an industrial park in Kirchheim bei Munchen and has a rental area of some 18,820m² and 683 car parking spaces. Its proximity to Munich and optimal infrastructure has attracted many well-known companies to set up in Kirchheim bei Munchen. The transaction is set to close by end of the year.
In line with Godewind’s business strategy, the property offers significant potential for adding value. The vacancy rate currently stands at some 63% and the average remaining lease term (WALT) is 3.9 years. The net cold rent amounts to currently around €0.8m or €11.50 per m² with a current rental level of 37%.
The development potential is to be raised, among other things, by means of vacancy rate reduction, rent increases and the renewal of rental agreements with anchor tenants. When it is fully let, which is planned for 2020, annualized rental income would rise to €2.3m based on current market rents. This corresponds to an FFO before overheads and after refinancing of some €1.4m, or an FFO return on equity of around 11.5%.
In addition, the office complex has a further 15,500m² available for expansion. Godewind is already in talks with a large healthcare provider about using this space. Once the transaction is completed Godewind will have a property portfolio of some €100m.
