CLS Holdings plc (LON: CLI) announced today that it has exchanged contracts to acquire CONNECT, a 140,491 sq. ft / 13,052 sqm multi-let office property in Cologne, for €30.5 million excluding costs. The purchase price reflects a net initial yield of 5.1%; the reversionary yield is estimated to be over 6%. The property is fully let and has a WAULT of 2.2 years.
CONNECT is one of the most prominent properties in the Airport Business Park in Cologne, a well-connected and growing destination in the south of Cologne between the city-centre and Cologne-Bonn Airport. The property is located adjacent to the S-Bahn station Köln Frankfurter Strasse.
The building is a well maintained and modern office building, with a strong tenant mix and a popular restaurant on the ground floor. The property consists of an 11-storey tower and five-storey lower main building, and is easily sub-dividable, making it both flexible and easy to re-let.
Cologne has a vacancy rate of circa 2.5% with limited supply of new offices and a growing population making it an attractive destination for investments.
CLS intends to finance the acquisition initially through existing cash resources with completion expected in 4-6 weeks.
Commenting on the acquisition, Fredrik Widlund, Chief Executive Officer of CLS Holdings plc, said:
“This acquisition gives us an opportunity to utilise our in-house German asset and property management team to deliver value to our investors over the long-term. Cologne has been an area of interest for CLS for several years, and this transaction allows us to enter the market at an exciting time.”