London-based CLS Holdings plc has exchanged contracts to acquire The Brix, an office building at Kruppstrasse 16, in Essen, Germany for €38.2 million.
The property, which is under rented at below €10 / sqm / month, has a contracted rent of €1.72 million and the purchase price represents a net initial yield of 4.2%.
The property is a factory-style office building located in the central business district of Essen. The offices are split across five interconnected buildings ranging from three to five floors, comprising a total of 21,750 sqm (234,115 sq.ft) of lettable space.
The Brix has transport connections, sitting opposite the Bismarckplatz underground station and an 8-minute walk from the central station in the popular South Quarter next to the new developments, “Literature Quarter” and the regeneration of the former RWE headquarters.
The buildings are 72% let to three tenants, anchored by Siemens AG which occupies the majority of the space. ”The unlet space provides an opportunity for CLS to refurbish and relet the vacancy to capture market rents, and once fully let the asset will have an estimated yield above 6%,” said CLS in a statement.
The acquisition will complete in early 2021. In Germany, CLS has now completed on the previously announced sale of Bismarckallee 18- 20, Freiburg for €22.5 million.
CLS has also agreed to sell two smaller properties in the UK, Quest House, Hounslow and Athol House, Aberdeen, for a combined total of £5.9 million which is 9.3% ahead of the 30 June 2020 valuation.
“The past year has been a challenging period but CLS has been able to acquire successfully a range of assets which provide opportunities from active asset management while bolstering the income of the portfolio. In 2020, we acquired over £200 million of properties while disposing of £70 million, taking advantage of opportunities presented by the current market dislocation. The acquisition of The Brix is another example of CLS’ ability to source and execute deals which are complementary to the portfolio while allowing us to use our expertise to deliver further value,” said Fredrik Widlund, Chief Executive Officer of CLS.