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CLS acquires trio of German offices for €89.7m

Storkower Strasse 132, in Berlin

CLS Holdings has acquired three offices in Germany for a combined €89.7m.

The company has exchanged contracts to buy Hansaallee 299, in Düsseldorf, Storkower Strasse 132, in Berlin, and Wendenstrasse 408 in Hamburg. It has paid a net initial yield of 4.8% for the three properties.

Combined, the three offices are 93% occupied by 31 tenants and have a weighted average unexpired lease term (WAULT) of 4.9 years.

The current annual rent on the three offices is €4.5m, which the group said was 22% below the estimated market rental values. This reflects a reversionary yield on the purchase price of 6.1%.

The Hamburg office presents the most value-add opportunity for CLS, with 21% of the 104,152 sq ft building vacant and the occupied space “materially underrented”.

The Düsseldorf and Berlin offices are both fully let. The acquisition of the portfolio is expected to complete by the second quarter of 2021.

Fredrik Widlund, chief executive, said:

“These assets are high quality, well located German offices and benefit from a diversified tenant base with the opportunity to secure market rents and valuation uplifts in the years ahead. In the past year CLS has been able to capitalise on a range of opportunities in our target markets, acquiring or committing to acquire assets for over £280m while remaining disciplined in our investment criteria.”

CLI : CLS acquires trio of German offices for €89.7m

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