02 August 2017
Reporter: Theo Andrew

Peakside buys Frankfurt office, fully commits €600 million PREF II fund

Peakside Capital has acquired the office space Theodor Heuss Allee 108 in Frankfurt, fully committing its €600 million PREF II fund in 18 months.

The purchase marks the fund’s third in the past four months, committing PREF II, which targets value-add and opportunistic real estate in Germany, a year ahead of schedule.

Acquired from Axa Merkens, the 11,000-square metre office comprises seven floors offering flexible space for tenants.

According to Peakside Capital, it has been able to increase occupancy levels from 60 percent to 80 percent through signing long-term leases, benefitting from the wider fundamentals of the Frankfurt office market.

Of the seven acquisitions made by PREF II, two have been sold for a combined value of €100 million. The fund expects to exceed its targeted returns of 20 percent.

Notable investments include Hamburg’s telecommunications hub, and the Frankfurt Airport Centre I, in a joint venture, which comprises 48,000 square metres of office and conference space.

Boris Schran, managing partner of Peakside Capital, said: “It is a testament to the whole Peakside Capital team that we have been able to execute transactions in excess of €600 million of project volume for our second value-add/opportunistic fund in such a short timeframe and a rather challenging market environment.”

He added: “This milestone highlights our ability to secure smart and attractive investments, particularly in Germany, where we see continued prospects for value-add and opportunistic strategies.”

The investment manager will apply the same strategy to PREF III, for which it has already started raising equity.

HauckSchuchardt guided Peakside Capital on legal and tax while Axa Merkens was advised by CBRE.

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