Mirae Asset GI made a 27 percent gain on its sale of the Stadthaus
Korean investment manager Mirae Asset Global Investments has sold the Cologne city hall to Germany’s DIC Asset AG for €500 million ($555 million), achieving a 27 percent capital gain after holding the asset for just over three and a half years.
Known locally as the Stadthaus, the Peter Böhm-designed office complex in western Germany houses 3,500 civil servants, and is fully leased to the city government with an average remaining lease term of nine years.
The Frankfurt-based buyer said in an announcement that it had purchased the property on behalf of five German institutional investors.
Sonja Wärntges, DIC Asset AG’s chief executive officer, commented that the Stadthaus is a “highly attractive landmark property occupied by a triple-A tenant and distinguished by stable long-term cash flows and distributions.”
According to Korean local media, a Mirae spokesperson said that the property, which was bought through its global real estate fund, had provided a stable annual return of eight percent.
Controversial Asset Brings Mirae a €135M Gain
Located next to the Bf Deutz high-speed railway station, Mirae Asset acquired the Stadthaus in April 2016 for €365 million from German real estate fund manager Joseph Esch, who developed the building in a joint venture with Sal Oppenheim before the private bank was taken over by Deutsche Bank in 2010.
The complex, which was completed in 1998, comprises a pair of office buildings with a net leasable area of 103,593 square metres (1.1 million square feet) and 2,900 parking spaces.
Mirae Asset GI CEO Jisang Yoo seems to have got a good deal on the Stadthaus
Providing desks for five of Cologne’s nine administrative units across its 16 floors, the Stadthaus is adjacent to the Lanxess Arena, which Mirae Asset Global Investment acquired in a JV with Hong Kong-based Junson Capital for €440 million in 2015.
The long-term lease on the Stadthaus is said to be at an above-market rate, having been negotiated by Esch with a government administrator who later became a managing director of the fund manager’s holding company Oppenheim-Esch-Holding Gbr.
Esch, who had an office in the Sal Oppenheim bank without holding an official position at the company, has since been charged with embezzlement relating to his business practices in Cologne.
Flipping German Offices
The sale of Cologne’s Stadthaus comes only five months after Mirae flipped the Taunusanlage 8 building in Frankfurt.
The firm in agreed in June to sell that 17-storey office building to an undisclosed buyer for €400 million, reaping a book gain of €120 million just 26 months after it had purchased the property for €280 million.
Mirae had improved the building’s value after increasing its occupancy from 60 percent to 99 percent, according to local Korean media.
Korea Goes Shopping in Europe
With $13.9 billion in real estate assets under management, MIrae Asset has been an active buyer overseas this year, contributing its share to the spending power of South Korean investors that made $5.3 billion in overseas real estate acquisitions during the first six months of 2019, according to a recent report by property consultancy JLL.
Just three months ago, the company agreed to buy a portfolio of US luxury hotels from China’s Anbang Insurance for $5.8 billion.
In July, two months prior to the Anbang deal, another Mirae Financial Group unit – brokerage Mirae Asset Daewoo – teamed up with French asset manager Amundi Real Estate to acquire the Jean-Paul Viguier-designed Majunga Tower in Paris for a reported €850 million.
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