Commercial property investment business CLS Holdings has unconditionally exchanged contracts to acquire a 23,982 square metre office building in Dortmund for €66.25m, excluding costs.
CLS said on Tuesday that the property, located in the Dortmund CBD and within 800m of Central Station and the Stadtgarten underground, was already occupied by tenants – including one of Germany’s leading financial institutions, a department of the federal state of North Rhine-Westphalia and two smaller tenants – with an overall weighted average unexpired lease term of 5.2 years.
The FTSE 250-listed group stated it plans to invest in the property to improve tenant amenities and sustainability features while leasing the remaining vacant space. The property has a net initial yield of 5.1% and a reversionary yield of 5.6%.
The acquisition was expected to be completed in April.
Chief executive Fredrik Widlund said: “This asset is a high-quality, well-located office and benefits from a diversified tenant base with the opportunity to secure market rents and deliver further value over the longer term.
“This is our third property in Dortmund, a growing and dynamic city that is benefitting from strong office demand and increasing rental growth. This acquisition again reflects our confidence in the underlying strength of the German office market.”
