IF THESE WALLS: Banking on Frankfurt

South Korean conglomerate Samsung’s real estate arm is buying one of Europe’s most iconic towers. Via an individual mandate with Augsburg-based real estate investment manager Patrizia Immobilien, Samsung SRA is set to become the new owner of the Commerzbank Tower.

Until its 2012 purchase of 30 Crown Place, in the City of London, Samsung SRA had solely invested domestically but saw the London market as a gateway into further global acquisitions.

After investing in London, the business turned its attention elsewhere when, in 2014, it purchased French defense company Thales’ Stuttgart headquarters for about 230 billion won ($202 million; €186 million) and an office building in Washington, DC, for about 100 billion won.

Neither Patrizia nor Samsung disclosed the value of the Commerzbank Tower deal, however The Korea Times cited a figure recently of around 900 billion won. The property was sold on behalf of two-closed-end funds belonging to Commerzbank’s subsidiary, Commerz Real. Samsung SRA Asset Management, the investment subsidiary of Samsung Life Insurance which ultimately acquired the tower, is expected to retain Commerzbank as the building’s anchor tenant.

The tower attracted interest from other parties though the most significant bids were understood to have also come from Asia. GIC, the Singaporean sovereign wealth fund, and Seoul-based investment bank Korea Investment & Securities also reportedly took part in the bidding war, though details of their bids were not disclosed.

It’s not difficult to see why the tower was so hotly contested. After finishing construction in 1997 the 56-story building became the world’s first so-called ‘green’ skyscraper, which employed environmentally-friendly technologies to reduce the structure’s energy emissions.

When the Commerzbank Tower was planned in the immediate aftermath of the fall of the Berlin Wall, Frankfurt’s Green Party, which governed the city together with the Social Democratic Party, urged the German bank to design a ground-breaking building that would set a new standard for energy-saving high-rise construction.

At the time, the concept of creating an ecologically-sound building using revolutionary construction techniques had been widely discussed but not implemented at such a large scale. The battle to design the original tower in the early 1990s was fierce but it was British architect Norman Foster, designer of New York’s Hearst Tower, London’s Wembley Stadium and The Gherkin, Berlin’s Reichstag complex and the HSBC building in Hong Kong, which was eventually selected to do the same for the proposed Commerzbank Tower.

The tower, however, is the most prestigious of Samsung’s acquisitions thus far. It provides 1.3 million square feet of office space for the Commerzbank headquarters, as well as winter gardens, natural lighting and air circulation, and is located in the heart of Frankfurt’s central business district, Bankenviertel.

From 1997 to 2003, the tower reigned as Europe’s tallest building until it was surpassed by Moscow’s Triumph-Palace, which topped out at 866 feet. This has been disputed, however, because the Frankfurt tower has an antenna
spire with a signal light on top giving it a total height of 985 feet.

The building was considered ahead of its time when it was constructed, because of its environmentally-friendly and energy-saving design. So much so in fact that in 2009, in recognition of its pioneering role in the evolution of green- design and use of techniques, the tower received the Green Building Frankfurt award from the city state officials.

After buying such a highly regarded, ‘green-designed’ asset, envious glances will have no doubt been cast in Samsung’s direction.