In an off market deal, CA Immo have signed and closed the acquisition of ‘Pohlstrasse 20’, a modern office building located in the prime Potsdamer Platz submarket in central Berlin. The property totals around 7,800 sqm lettable space and is fully let to high quality tenants such as Thyssen Krupp Elevator and Bombardier. The purchase price of € 47.35 m reflects a day one gross initial yield of 2.7 % on in place gross rental income of €1.3 m. With an average in place office rent of c. € 12.50/sqm, material rental reversion is expected to deliver in excess of a 5.5 % gross yield once stabilized.
Following the acquisition of the office building ‘Am Karlsbad 11’ in April 2020, and start of construction on the office building ‘Grasblau’ in February 2020, both located within the direct vicinity of ‘Pohlstrasse 20’, with this transaction, CA Immo takes another step in its core market expansion strategy and capital rotation program, setting the path for continued growth of recurring earnings while improving the underlying quality of the portfolio. As planned, the acquisition will contribute to CA Immo’s recurring earnings (FFO) from the first quarter of 2021.
Keegan Viscius, Chief Investment Officer (CIO) of CA Immo: “With the ‘Pohlstrasse 20’ office building we are buying a great asset in terms of quality, tenant covenant, and location, in one of the most attractive office submarkets in Berlin. With an existing footprint of four existing buildings and one under construction in the submarket, we have high conviction on our ability to capture rental reversion at this property given recent leasing experience in our existing portfolio (post-COVID) at rents more than double those currently in place at ‘Pohlstrasse 20’. With an active asset management business plan to upgrade and modernize the property as leases roll, we benefit from the immediate rental income secured by high quality tenants and a low rent basis giving a large margin of safety.”
