Samsung Asset Management and Patrizia Immobilien are in talks with lenders to refinance the €675 million Commerzbank tower in Frankfurt, said three sources familiar with the situation.
The Korean investor and its German asset manager are seeking either a bridge loan or a long-term loan after having failed to sell the bank’s German headquarters, said the first source. The existing debt matures this year. Dutch bank ING provided a loan at circa 50% of the €675 million purchase price in 2017 and subsequently syndicated part of the debt to Pbb and BayernLB.
Samsung, which bought the 109,200-square-metre property in 2016, launched a sales process last year after having enquired about a loan extension or refinancing, said the second source. Investors have been shying away from large deals as rising interest rates and economic uncertainty make it difficult to obtain finance. Valuing large properties is also difficult in the absence of any comparable deals.
Smaller towers still trade. Last month, fund manager Deka Immobilien sold a Frankfurt tower at 20% discount to the original €100 million guide price, as reported. Last year, Generali bought the K26 office tower for €155 million, as reported. The deal had been agreed before interest rates rose sharply and the economic outlook darkened. The last, large tower that changed hands is the Marienturm, which was bought last March by Korea's NPS and German fund manager DWS for more than €800 million, as reported.
In a blow to Frankfurt, banks are expected to take less space in Germany’s financial capital as they are embracing hybrid working, reported Cushman & Wakefield. The property consultant sees banks taking up 1.2 million square metres less space this year, a 20% drop compared with 2021.