PwC Pension Fund Mulling Purchase of Frankfurt Skyscraper Stake

on Aug 28, 2013
Listen Wednesday, August 28th: A PricewaterhouseCoopers (PwC) pension fund is in talks over the purchase of a stake in a German skyscraper in what could become one of Europe’s biggest property deals this year, *Reuters* has reported.

The PwC pension fund is run for employees of the professional services firm in Germany and operates as a separate entity from the main company, which is headquartered in London. The PwC pension fund is the largest tenant in the 200-metre tall Tower 185 in the Gallus district of Frankfurt, part of which will be sold by owner CA Immo (RA:BZY). The Austrian developer aims to cut its debt by €600 million this year.

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In March, CA Immo said that Tower 185, Germany’s fourth-tallest skyscraper, was worth about €500 million and it hoped to sell a 75-percent stake in it. The Vienna-based company, which yesterday said it boosted net profit by 76 percent in the second quarter as it cut costs and raised its rental operating margin, confirmed that it was in talks with one bidder over the potential partial sale of Tower 185. CA Immo also said that it hoped a deal for an undisclosed stake in the skyscraper would be completed in the second half of the year, although in May the real estate developer had stated that it expected “a successful outcome to be confirmed during the summer”.

**Skyscraper’s Location Deters Prospective Buyers**
!m[Owner CA Immo Confirms Talks with Potential Buyer](/uploads/story/5145/thumbs/pic1_inline.jpg)
According to German real estate agents, Tower 185 has not been snapped up yet because of its location. Standing several hundred metres away from the main financial district of Frankfurt, the skyscraper is “a stone’s throw too far away from the prime area,” a broker in the city has said, as quoted by *Reuters*.

The building is 80-percent let, according to figures posted on its website.
Brokers have also noted that any sale of a stake in Tower 185 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 compared to five percent or under for the best Frankfurt office buildings in prime locations.
**As of 11:25 BST buy CA Immo shares at €9.61.**
**As of 11:25 BST sell CA Immo shares at €9.51.**


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