The Board of CLS is pleased to announce that it has exchanged contracts for the purchase of an office property in Berlin at a total consideration of €10.8 million (£7.25 million) inclusive of all costs.
The property known as Bismarckstrasse 105 and Leibnizstrasse 11-13 comprises 5,673 m² (61,059 sq ft) of offices and storage space, together with 71 car parking spaces. The building is currently 77% let to two tenants with the main tenant occupying more than 50% of the building on a lease until June 2016. The property was constructed in the 1960s and comprehensively refurbished in 2002-2003.
The purchase price will be paid in two tranches, with an initial payment of €8,175,000 (£5,487,000) in December 2006 and the balance to be paid in December 2007.
The existing rental income is €557,281 (£374,000) and the estimated rental value of the building once fully let is €794,000 (£532,000) which will generate an initial return on equity of 16.1%, whilst the cash return on equity is forecast at 12.1%.
The current value of the German portfolio of CLS, including properties for which contracts have been exchanged but not yet completed, is €191.6 million (£128.4 million).
Executive Chairman, Sten Mortstedt, commented: "This investment offers good returns and a potential for value increase in a strengthening Berlin market. CLS intends to make further selective acquisitions in Germany, where current yields generate attractive returns on equity, with potential upside in yield compression and rental growth."
Source: CLS Holdings