Peakside and Madison sell Frankfurt Airport Center

A joint venture between Madison International Realty and Peakside Capital AG has exchanged contracts for the sale of its shares in the office property Frankfurt Airport Center located in Frankfurt, Germany.

The shares are being bought by a joint venture between Godewind Immobilien AG and ERWE Immobilien AG for approximately €168 million ($190 million). The transaction, which is structured as a share sale, is expected to close by the end of this year.

The office property comprises a total rental space of around 48,000 square meters (516,000 square feet) and 182 parking spaces and has a strong lineup of tenants including Lufthansa, Fraport, Airport Club as well as several airlines and service providers. The asset is directly linked to terminal 1 of Frankfurt International Airport and located next to the ICE train station.

Peakside had invested in the property on behalf of the Peakside Real Estate Fund II (PREF II), while Madison made its investment through International Real Estate Liquidity Fund VI (MIRELF VI).

Along with the acquisition of the building from a UBS fund in September 2017, an extension of the fixed term of the leasehold with the airport operator Fraport AG for a further 30 years until 2090 was achieved. In addition, since acquisition, new lease contracts for more than 10,000 square meters (108,000 square feet) of office space have been concluded with new or existing tenants. As a result, the rental income for the building increased approximately 20 percent from around €8 million ($9 million) to around €10 million ($11 million) per year, while occupancy increased from 60 percent to 82 percent. Furthermore, the average lease term increased to six years. An extensive planning and refurbishment program was launched providing redesigned new concepts for the public and rental spaces.