LONDON Aug 28 A PricewaterhouseCoopers (PwC)
pension fund is in talks to buy a stake in a German skyscraper,
in what could be one of Europe's biggest property deals this
year, a source close to the negotiations told Reuters.
Austrian developer CA Immo said on Tuesday it was
in talks with one bidder to sell a stake in the 200-metre Tower
185 in Frankfurt, in which PwC is the largest tenant, as part of
a wider disposal plan to cut its debt by 600 million euros ($804
million) this year.
In March, the Vienna-based company said Germany's
fourth-tallest skyscraper was worth about 500 million euros and
it hoped to sell a 75 percent stake, representing a deal of
about 375 million euros.
The source did not confirm the size of the stake under
discussion with the pension fund nor how close any deal was.
CA Immo and PwC declined to comment.
The PwC pension fund is run for employees of the company in
Germany and operates as a separate entity from the main
accountancy firm, whose logo is at the top of the tower that
opened at the end of 2011.
Real estate in major cities in European economies such as
Germany and Britain is in demand among property investors for
its safe returns in choppy financial markets, though some are
slowly returning to the higher returns on offer in countries
such as Spain as euro zone break-up speculation fades.
CA Immo said in May it expected "a successful outcome to be
confirmed during the summer" though on Tuesday it said it hoped
a deal for an undisclosed stake would be completed in the second
half of the year.
Local real estate agents said the tower's location may
explain why it hadn't been snapped up already, with the building
lying several hundred metres from the main financial district.
"It's a stone's throw too far away from the prime area,"
said one Frankfurt broker, who added the fact PwC dominated the
tower may also put off other tenants from taking space in a
building that is 80 percent let, according to the building's
Brokers said any sale would likely represent a yield, or the
annual rent as a percentage of the property's value, of about
5.5 percent to 5.75 percent as opposed to five percent or under
for the best Frankfurt office buildings in prime locations.