Europe’s fastest elevator whisks visitors up to a 100-meter high platform overlooking Berlin. The 20-second elevator ride in Potsdamer Platz’s Kollhoff-Tower offers panoramic views for €6.50, a small sum to overlook an area that has been a microcosm of German progress, regression and, at long last, financial triumph over its 143-year history.
The tower, which was acquired by Brookfield Property Group in January, aided by capital from Korea’s sovereign wealth fund Korea Investment Corporation, as part of a deal to secure a mixed-use trophy estate in Potsdamer Platz for around €1.4 billion.
Brookfield’s newly purchased high-rise and other properties, which was said to be one of the largest deals in the country since 2008, comes with a history as
complicated as Germany’s itself.
The property has been in real estate investment manager hands before. SEB Asset Management’s SEB ImmoInvest mutual fund acquired the property, and 18 others in Potsdamer Platz from German multinational automotive corporation Daimler in December 2007 for about €1.4 billion.
SEB, which was sold to London-based property services firm Savills in September and rebranded as Savills Fund Management, suffered during its ownership of the Kohlloff-Tower.
Like many German real estate mutual funds shortly after the global financial crisis, it struggled to meet redemption requests: the fund by law has to be dissolved by 2017 after failing to meet investor withdrawals.
From its Potsdamer holdings SEB had little trouble selling the Hyatt hotel to Qatar’s Al Rayyan Tourism and Investment in 2013, but faced difficulties trying to unload the rest.
Fosun International and Ping An Insurance were both reportedly in talks to buy the 18 buildings, but Brookfield emerged the victor in the fall of 2015 and completed the sale last month. Aside from the Tower the Toronto-based asset manager gained about 1.4 million square feet of office space, 500,000 square feet of retail, over 300 luxury residential units, a luxury hotel, two theaters and a casino.
In spite of the prior owner’s toils, the Kollhoff-Tower is a testament to the evolution of the estate which traces its origins to a humble rail station that opened in 1843.
The Tower which stands as one of the jewels in the crown of the site came long after Potsdamer Platz’s first heyday in the 1920s and 1930s. Back then, the site was Europe’s busiest traffic center and the heart of Berlin’s famous nightlife.
But, after near destruction of the entire plaza during the later phase of World War II commercial activity was put on hold. The construction of the Berlin Wall through the site in August 1961 led to further deterioration.
Potsadamer Platz, and the Kohlloff-Tower, kicked back into life when the Wall fell and the government divided the square into four sections, selling each to a commercial investor. Daimler bought one of the quarters and developed of the Tower.
The 25-story building includes a mixed-use ground floor, office space and the Panoramapunkt, the open-air viewing platform and café with an outdoor terrace. Such tenants include the international law firms Freshfields Bruckhaus Deringer, and Olswang, and eminent German lawyer and art-lover Peter Raue.
The property is named after its Berlin-based architect, Hans Kollhoff, and was designed in the style of the early skyscraper architecture of the 20th century in the US.
Not that the high-rise has always looked the trophy asset. In early 2009, the building was surrounded by scaffolding for repairs. Due to moisture penetrating the brick facade frost damage caused facade parts to fall. So a temporary structure around the building was erected to protect pedestrians on the sidewalk.
Some seven years later, Germans and foreign tourists alike can now peer over the edge of the Kollhoff-Tower, viewing the results of one of the most successful redevelopment projects in modern European history.