BELGIUM
PATRIZIA AG, the global partner for pan-European real estate investment, has bought the iconic Louise Tower in Brussels as part of a property portfolio. It features six office buildings and one retail asset, acquired by purchasing Athora Real Estate Investments B.V., from Athora Belgium S.A., for €190million.
Louise Tower, on Avenue Louise, in central Brussels, was originally constructed in 1966 and provides office and retail accommodation. Pending planning approval, the 30,000 square meter Louise Tower is earmarked for a major redevelopment led by PATRIZIA’s pan-European development team. The redevelopment of the 25-storey Louise Tower is expected to be completed by the end of 2022. It will include a complete replacement of the façade, and all mechanical and electrical equipment.
Upon completion of the work, the Grade-A Louise Tower will feature top energy performance demonstrated by its BREEAM excellent rating.
Exciting and environmentally sustainable project in property portfolio
Sheelam Chadha, who leads transactions in the PATRIZIA Brussels office, says of Louise Tower, “This exciting and environmentally sustainable project will have a highly positive impact on Brussels prime office options for occupiers.”
The portfolio includes an additional five office properties and one high street retail asset, let to over 45 tenants spread over 35,000 square meters in well-known locations in the city.
“With PATRIZIA’s long track record of redeveloping properties and executing value add strategies, we are confident that this latest acquisition will be highly successful,” Sheelam Chadha adds.
“The Louise Tower is in many ways the crowning glory of this seven-asset portfolio. The Tower is located in an area which lacks prime Grade A office space, home to the some of the biggest names in the world of finance, law, insurance and accounting. This lack of space in the city of Brussels has seen upward evidence of growth in prime rents. We are convinced that the Tower will be the place to be in Brussels for major international firms looking for a higher quality building than is currently available.”
The acquisition of this portfolio increases PATRIZIA’s total assets under management in Belux to around €1.62 billion.
Sirius acquires two business parks for €33.4 million
GERMANY
Sirius Real Estate has completed the acquisitions of two business parks in Germany. It has acquired Neuss II, a business park near Düsseldorf, and Neuruppin Business Park, in the Brandenburg region, for a combined total of €33.4 million (including acquisition costs), reflecting an aggregate EPRA net initial yield of 6.8%.
Neuss II
Originally constructed in 1987 and since expanded, Neuss ll provides a total of 34,000 square meters of net lettable space (21,900 square meters of warehouse/production, 11,700 square meters of office and 400 square meters of other space), together with 371 parking spaces, on a total plot size of 58,800 square meters. The property is on Fuggerstrasse in Neuss, 9.5 km south of Düsseldorf city centre. Sirius already owns an 18,000 square meters office building in Neuss and two other business parks in Düsseldorf.
The asset is 81.5% let to 16 tenants, producing an annual rental income of €1.3 million, reflecting an average rate of €3.84 per square meter, and has a remaining WALT of 4.4 years. Tenants include Max Mothes GmbH, global specialists in the production and logistics of high-performance connecting technology, Steep GmbH, DINAX GmbH and FEAG GmbH, service providers in power generation and distribution.
The property has been acquired from a regional family real estate office for €19.1 million (including acquisition costs), reflecting an EPRA net initial yield of 5.4%.
Neuruppin Business Park
Originally constructed in 1992 and since expanded, Neuruppin Business Park, provides 22,400 square meters of net lettable space (12,600 square meters of production space, 7,200 square meters of warehouse space and 2,600 square meters of offices), together with 169 parking spaces on a total plot size of 108,200 square meters. The property is 4.3 km south of Neuruppin city centre and 75 km north west of Berlin. Neuruppin is likely to benefit from a €1.4 billion road infrastructure expansion project on the main highway between Berlin and Hamburg, anticipated to complete in 2022.
The asset is 100% let to a single tenant, ESE GmbH, Europe’s leading manufacturer of temporary storage systems for waste and recyclables, on a lease with 5.5 years to run, at a current annual rent of €1.3 million, a rate €4.97 per square meters. The property has been acquired from Otto Immobilien GmbH & Co. KG for €14.3 million (including acquisition costs), at an EPRA net initial yield of 8.6%.
The company has now completed €98 million of the €170 million in acquisition capability that was set out in its Interim Results announced on 25 November 2019. These acquisitions provide a total of 136,000 square meters lettable area, with 14% vacancy, producing a current annual rent of €7.7 million, reflecting a blended EPRA net initial yield of 6.5%. Additionally, Sirius is reviewing a number of potential acquisitions for investment of its remaining designated acquisitions capital.
Successful acquisitions
Andrew Coombs, Chief Executive Officer of Sirius Real Estate, says, “The last month has been particularly successful on the acquisitions front providing us with some great assets which have good value add potential that can be realised next year and beyond.
“Neuss ll fits well with our strategy of buying assets at low capital values, with low average rents compared to the local market and located around key German cities. It offers us a good opportunity to add significant value by playing to the strengths of our integrated business model and track record of maximising occupation and growing rental levels.
“The Neuruppin property, which is 100% let to a tenant with a strong covenant with a WALE of 5.5 years and an EPRA net initial yield of 8.6%, is a very good acquisition, particularly when you take into account the tenant’s potential plans to expand in the area as well as the further opportunity to develop vacant parcels of land within the site.”
New logistics property bought for €50.3 million
THE NETHERLANDS
The Board of Tritax EuroBox plc has acquired a new prime logistics property at Breda, in The Netherlands. It has been bought for €50.3 million (excluding purchaser’s costs), reflecting a net initial yield of 4.6%, with the letting of vacant units set to add to that.
This purpose-built property is in an established location along the main east-west logistics corridor in the Southern Netherlands. It is next to a junction of the A27 motorway, with excellent domestic and international connectivity. The property also benefits from good railway and port connectivity with the ports of Rotterdam and Antwerp around 50km away.
The property has a gross internal area of 46,185 square meters and is divided into four units, with an eaves height of 12 metres with significant yard area and parking. The building is fitted with LED lighting and solar panels and is expected to achieve the “Very Good” BREEAM certification.
This investment is fully income-producing from one lease and a rental guarantee and offers attractive scope for value and income enhancing opportunities. Two units with a combined gross internal area of 20,415 square meters are leased to Abbott Logistics B.V. on a new 10-year lease term. Abbot Logistics is part of Abbott Laboratories, a medical devices and healthcare company listed on the New York Stock Exchange. The lease is subject to annual indexation of 2.0% per annum.
The remaining two units with a combined gross internal area of 25,857 square meters have a 12-month third party rental guarantee to the company. The plan is to let them out and expressions of interest have already been received.
First acquisition in The Netherlands
Nick Preston, Fund Manager of Tritax EuroBox, says, “We are delighted to announce the eleventh investment for Tritax EuroBox plc, and our first acquisition in The Netherlands. This newly developed, high specification sustainable asset is situated in Breda, a prime logistics location, which benefits from excellent transport connectivity and a robust labour market.
“We are confident of delivering the identified business plan to produce further value from this asset, capitalising on this attractive logistics location with increasingly strong supply/demand fundamentals, which will further support the Company’s delivery of secure long-term income to shareholders and an attractive total return.”
Helsinki offices purchased for around €64million
FINLAND
NCC Property Development is selling offices in Helsinki for approximately SEK 680 million – around €64million at current exchange rates.
The B and C buildings of the Fredriksberg office projects in the distinctive Konepaja district of Helsinki have been bought by the German KanAm Grund Group and its LEADING CITIES INVEST fund.
Petri Bergström, Head of NCC Property Development in Finland, says, “In Fredriksberg, we have developed a unique office project with a modern, sustainable design, sense of community and an attractive service offering. We are very pleased to initiate cooperation with KanAm Group. It’s great that they have chosen this project as their first investment in Finland, with its location in one of Helsinki’s most attractive neighborhoods.”
The KanAm Grund Group, whose main office is located in Frankfurt, is an international real estate enterprise. The retail real estate fund LEADING CITIES INVEST, part of the KanAm Grund Group, is now also present in Helsinki.
Nationally significant industrial and cultural area
The Konepaja district in Helsinki is defined as a nationally significant industrial and cultural environment.
Yirui Jiang, Head of Property Development and Project Management at NCC, says, “Fredriksberg is not only designed as a group of office buildings, but as a vibrant meeting place for Helsinki residents and visitors offering life also beyond office hours. It reflects well our design principle to create thriving places in thriving cities.”
NCC is developing the area in four phases. Fredriksberg A was completed and sold to Swiss Life Asset Managers in autumn 2018. The second and third phases, Fredriksberg B and C, have been started with completion planned for the second quarter of 2020. They cover a total of approximately 11,000 square meters of lettable area for offices and retail. The implementation of the final phase D is expected to begin immediately after completion of B and C.
At the time of sale, the leasing rate was 40%, and NCC is providing a two-year rental guarantee for unleased space in connection with the sale. The transaction will be conducted as a company divestment, with an underlying property value of approximately SEK 680 million. The sale will have a positive impact on earnings in the second quarter of 2020 in the NCC Property Development business area, says NCC. The transaction will have a positive cashflow effect in the fourth quarter 2019, since it is a transaction with forward funding.
The plan is to environmentally certify the project at an Excellent rating according to the international BREEAM system.
Roschier advised the buyer in the transaction.
KanAm Grund Group is a German-based, international real estate enterprise with the main office located in Frankfurt. It has handled a transaction volume of over USD 33 billion since it was established in October 2000.
Sources: https://www.ncc.com/media/pressrelease/6fb18f014232c045/ncc-sells-office-projects-in-helsinki-for-approximately-sek-680-million/ and https://www.roschier.com/newsroom/roschier-advised-kanam-grund-in-its-acquisition-of-office-projects-in-helsinki/
Crossrail set to boost West One mixed-use scheme
UNITED KINGDOM
British Land has acquired a 25% share of West One, a 92,000 square foot mixed-use scheme on London’s Oxford Street for £54.25 million.
As part of the agreement, Norges Bank Investment Management will continue to own 75% and British Land will assume responsibility for the asset management and any future development.
West One comprises an even mix of office and retail space, both fully let, and sits at the entrance to Bond Street station in the heart of London’s West End. It benefits from around 500,000 visitors a week, which is set to increase once the Crossrail scheme begins.
West One will then be linked to British Land’s existing mixed-use assets, including Broadgate, Paddington Central and Ealing Broadway.
Darren Richards, Head of Real Estate, says, “West One is an extremely well located, mixed-use scheme, with great future potential. Crossrail will bring even more people to the site and help connect it to our London campuses. The acquisition reinforces our strategy of building an increasingly mixed-use business and working with global investors, in this case, Norges Bank Investment Management, who we’re delighted to be extending our relationship with.”
British Land’s portfolio of high-quality UK commercial property is focused on London offices and retail around the UK. It owns or manages a portfolio valued at £15.4 billion (British Land share: £11.7 billion) as at 30 September 2019, making it one of Europe’s largest listed real estate investment companies.
Its strategy is to provide places that meet the needs of its customers and respond to changing lifestyles, by creating great environments inside and outside its buildings.
The image is from Wikipedia.com and is taken by Sunil Prasannan.
Source: https://www.britishland.com/news-and-views/press-releases/2019/20-12-2019
For other European commercial property deals from PATRIZIA and others see: https://www.consorto.com/blog/patrizia-acquires-e1-2b-logistics-portfolio/
