Morgan Stanley Real Estate is likely to sell the Trianon office tower in Frankfurt in the next few months, reliable sources have told PropertyEU. The 70,000-m2 property is believed to have a book value of just EUR 471 mln, and is being sold as part of the liquidation of the P2 Value Fund. Morgan Stanley declined to comment.

The Trianon building complex comprises six units: the 44-storey office tower, completed in 1993, at Mainzer Landstraße 16, the historic Villa Seligman at Mainzer Landstraße 18, three residential properties with 43 units at Klüberstraße 6-10 as well as a residential and a mixed-use residential/commercial building with eight flats and a restaurant at Zimmerweg 8.

Morgan Stanley Real Estate purchased the 186-metre tower at Mainzer Landstraße 16 on behalf of its Eurozone Office Fund (MSEOF) from Germany's DekaBank in 2007. The purchase price was EUR 620 mln, reflecting a net initial yield of 4.2%. At the time DekaBank was to continue to occupy about half of the leaseable area of Trianon - the fifth largest building in Frankfurt. Law firm Linklaters and other service providers were also among the principal tenants.

Today, there is 8.9 years unexpired on the lease, with 17% of the leaseable space vacant.

In terms of ownership just under 57% of the Trianon property is held in the Morgan Stanley P2 Value Fund, with the remainder held by Morgan Stanley Eurozone Office Fund. It remains unclear whether both funds will sell their holding or if it will just be P2 Value's share. Morgan Stanley RE announced in October 2010 that it is liquidating the P2 fund and that its 34 properties are to be sold over a period of three years. The proceeds will be paid out to investors.