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JLL has sold the PalaisQuartier and neighbouring land plot in Frankfurt

By far the largest commercial property transaction of the year 2014 in Germany – mixed use urban centre offers in total around 115,000 sqm of lettable area.

FRANKFURT, 2nd December – JLL has advised on the sale of the mixed use property complex PalaisQuartier in Frankfurt am Main on behalf of the Dutch company Rabo Real Estate Group / KP Investments. With a purchase price of more than € 800 million, the sale represents by far the largest commercial property transaction in Germany of 2014 and is one of the top five transactions of the year in Europe so far.

The purchasers are Deutsche Asset & Wealth Management (Deutsche AWM) together with ECE Projektmanagement GmbH & Co. KG for the existing PalaisQuartier property. STRABAG Real Estate GmbH has purchased the adjacent “Rundschauareal” land plot. The legal advisors for the vendor were Hengeler Müller with Drees & Sommer advising the vendor on technical matters.

Jörg Ritter, member of the German management board and head of retail at JLL believes the transaction to be an important one for the German real estate market for a number of reasons. “Our global oriented marketing process has proven that there is an extraordinary level of interest from international investors for German trophy investments. Investors from as far wide as the USA, Europe, the Middle East and Asia offered more than € 4 billion of equity for the asset. Our global roadshow was successful in creating an international awareness in Frankfurt and the property itself with investors from around 20 different countries coming to visit the asset.”

In addition, Ritter commented on another observed trend: “In the past, investors sought to purchase single asset classes due to a sense of lesser risk. More recently we have noticed a marked global interest in more complicated, mixed use assets that take on the role of an urban microcosm in the best inner-city locations. The sale of PalaisQuartier is a perfect example of this trend.”

Situated directly on the Zeil, one of the highest retail turnover streets in Europe, the PalaisQuartier property is one of the most extraordinary urban building complexes in Europe. The complex consists of three different building parts with varying uses including the MyZeil shopping centre, the Nextower office tower and the luxury hotel Jumeirah Frankfurt. With a total lettable area spanning 115,000 m², the PalaisQuartier complex is an architectural landmark that demonstrates optimal use of urban space in the city.

Jörg Ritter also draws on a third important aspect of the transaction: “The growing amount of property transaction volume attributed to international investors could have given the impression that German domestic investors have been more laid back towards their home country. But the PalaisQuartier transaction proves otherwise. In a thoroughly competitive bidder process, two well-known German investors and a developer were able to act in a joint venture and stave off a strong level of international competition.”