Status: 07/28/2021 2:45 p.m.
Despite the home office trend and the increasing vacancy rate, the insurance company Allianz and a partner have bought an office tower under construction in Frankfurt – for more than one billion euros.
Regardless of the increased vacancy in office space, Allianz-Versicherung has acquired an office tower in Frankfurt, which should be ready for occupancy in three years. The insurer and the Bavarian Supply Chamber paid 1.4 billion for the 233 meter high tower called “T1” – more than ever before for a single building in Germany, reports the “Frankfurter Allgemeine Zeitung”, citing the broker JLL.
The skyscraper is being built in the “Four” ensemble in the middle of the city’s banking district. Investors do not see the fact that increased home office use could make a lot of office space superfluous after the corona shock. The business center of Frankfurt is characterized by a low vacancy rate of 2.8 percent and limited office space until 2024 and has shown enormous resilience during the pandemic, explained Nicole Pötsch from Allianz Real Estate. “The fact that some of the leases for the ‘Four T1’ were signed during the pandemic underscores the attractiveness of the property and its location.”
Apparently two thirds already rented
According to media reports, two thirds of the building are already rented. DekaBank, the savings banks’ fund company, has rented around 16,000 square meters in the tower. That is ten office floors and thus 22 percent of the total area.
In addition, it is already known that the renowned law firms Freshfields, Baker McKenzie and Allen & Overy will move to the “T1”. The youngest tenant in the building is Boston Consulting. The consulting firm has rented 7,300 square meters of office space, according to real estate agents.
Insurers need to be particularly careful when investing
The high-rise is part of an ensemble consisting of four towers in the immediate vicinity of Commerzbank, the striking headquarters of which at 259 meters is the tallest office building in Germany – even before the 60-storey and 256.5-meter high exhibition tower in Frankfurt, where Germany Headquarters of the US investment bank Goldman Sachs was based.
Insurance companies are subject to special regulations for their investments. You are legally obliged to be able to ensure that the insurance contracts can be fulfilled at any time. To this end, the “safety, quality, liquidity and profitability” of the entire system must be guaranteed, emphasizes the BaFin supervisory authority. This means that insurers invest their customers’ premiums primarily in government bonds and real estate, because these are considered safer than stocks, which are often subject to high fluctuations.