Singapore-listed CapitaLand Commercial Trust, in its first foray into Europe, is buying the special-purpose vehicle that owns the Gallileo commercial property in Frankfurt, under a partnership with its parent, CapitaLand Ltd.
PATRIZIA Immobilien AG's Triuva unit is selling the asset for an undisclosed price.
The freehold property in Frankfurt's Banking District comprises a 38-story commercial building with ancillary retail and a four-story office building. The asset was valued at €356.0 million, reflecting a 1.4% discount to the property's €360.9 million open-market value as of March 31. It has a net lettable area of 436,175 square feet and is anchored by Commerzbank AG, which occupies about 98% of the property.
At the completion of the transaction, expected in June, Gallileo will be 94.9% held by CapitaLand Commercial and 5.1% by CapitaLand.
CapitaLand Commercial said it will fund its €342.7 million contribution to the purchase with a combination of bank loans worth €212.2 million and an estimated S$208.8 million of net proceeds from a planned private placement of 130,000,000 new units.
In a news release, the office-focused real estate investment trust said each unit included in the placement is expected to be priced within the S$1.631 to S$1.676 range. The indicative price range reflects a roughly 3.2% to 5.8% discount to the REIT's S$1.7306 volume-weighted average price per unit as of May 16.
Citigroup Global Markets Singapore Pte. Ltd., DBS Bank Ltd. and J.P. Morgan (SEA) Ltd. are the joint book runners and underwriters of the planned private placement.
In light of the announcements, CapitaLand Commercial requested a trading halt on the Singapore stock exchange May 17.
As of May 16, US$1 was equivalent to S$1.34.
