A joint venture between CapitaLand and Lum Chang Holdings has bought an office building in Frankfurt for €234.3 million (S$374 million) in cash.
Real estate developer CapitaLand holds 94.9 per cent of the joint venture and paid €222.3 million of the price. Construction company Lum Chang holds the remaining 5.1 per cent and paid the rest.
The freehold, multi-tenanted building known as Main Airport Center will be CapitaLand's first office building in Germany.
The property has an agreed value of €245 million. It is 84 per cent occupied with more than 30 tenants, and leases secured for 2018 are expected to raise occupancy to more than 95 per cent.
The building stands close to Frankfurt Airport and is a 20-minute drive to the city's central business district.
A new metro station about 600m away is expected to open in 2019, offering a 10-minute direct connection to the city centre.
A third airport terminal is also expected in 2023.
"Demand for commercial real estate is expected to rise given Germany's positive economic outlook," CapitaLand chief investment officer (designate) Lee Chee Koon said in a statement.
"Frankfurt's office market is on an upswing as many major multinational companies and Japanese banks are planning to open new offices in (the city)... We see strong potential to step up investments in commercial real estate in Europe and key cities worldwide," he added.
CapitaLand chief executive officer Lim Ming Yan said: "We will remain aggressive but disciplined to reconstitute our portfolio and deploy capital to quality higher yielding assets, while continuing to grow our recurring income base by strengthening our operating platforms and assets under management," Mr Lim said.
fDi Intelligence, part of Financial Times, said Frankfurt is the top investment destination in Germany.
It is at the core of the dynamic Rhine-Main Metropolitan region with 365,000 companies and close to 2.9 million employees, generating an annual GDP of more than €200 billion, according to consultancy Colliers International.
