Hana Financial Investment Co. Ltd. will acquire a medium-sized office building in the Frankfurt urban area for around 120 million euros ($137 million), which Germany’s Commerzbank leased under a 15-year term.
A unit of Commerzbank had picked the South Korean brokerage firm as a preferred buyer of the seven-story building in October, 2018, according to investment banking sources on Dec. 31.
Hana will close the acquisition by early January via Hines, a real estate investment firm, and sell down the equity interest in the 36,000-square-meter property.
The investment is expected to yield an average 7% over a six-year investment period, given that the lease with Commerzbank does not include an early termination clause, the sources added.
Vitreum is located in the city of Eschborn, 7 km northwest of Frankfurt’s central business district.
Eschborn attracts multinational companies such as Vodafone, Deutsche Bank, Ernst & Young, Samsung and LG with a low business tax.
The transaction marked the third overseas property investment led by Hana Financial’s global investment finance team that the brokerage company launched late last year to ramp up global investments.
In October, Hana bought two prime Dublin office buildings for 345 billion won: Charlemont Exchange for about 200 billion won and No 2 Dublin Landings for about 145 billion won. Both are occupied by WeWork, a US shared office provider.
Hana Financial is an affiliate company of Hana Alternative Asset Management Co. Ltd. which is also pushing for global property investments.
By Daehun Kim
<Edited by Yeonhee Kim>
(Modified on Jan. 2, 2019 to add some details about the selling side and remove details about the value of equity investment and the South Korean asset manager working for the deal.)