The Île-de-France office market leapt back to life at the turn of the year with the sale of two major office schemes representing a total value of nearly €1bn.
Covivio, a listed property group with €24bn of assets, teamed up with funds managed by Blue Owl Capital on the Vélizy-Meudon site of Thales, a major player in the defence and aerospace sectors.
Under the deal, which values the entire site at €503m, Covivio formed a joint venture with Blue Owl Capital, effectively giving up a 49% stake in the Thales campus and retaining a 51% interest. A day later Covivio also announced the €200m sale of Casa Moncler in Milan (pictured), in the largest Italian office transaction in three years.
In Central Paris, developer Icade agreed to sell the Marignan building to Black Swan Real Estate Capital, acting on behalf of Bain Capital and Revcap, for €402m.
The historic Art Deco–style building at 29–33 avenue des Champs-Élysées received around twenty offers in a highly competitive sales process that saw the participation of more than 100 investors.
Nicolas Joly, chief executive officer of Icade, said the deal allowed the group “to take advantage of favourable market conditions”, with the sale price reflecting a 20% premium to the asset’s net value at year-end 2024.
Investors are looking positively at prime offices, which are expected to offer the highest returns of all prime sectors, at 9.3% per annum over the next five years, according to research by investment manager AEW.
“Yields have widened quite a bit over the past four years and we are seeing positive stories on the occupational side, including most recently JP Morgan planning to build a new tower in Canary Wharf,” points out Hans Vrensen, head of research & strategy Europe at AEW.
The investment manager believes that office vacancy has peaked across Europe and will start declining from next year, with the bifurcation between prime CBD and prime non-CBD offices expected to ease as new supply remains limited.
| Recently completed deals | |||||||
|---|---|---|---|---|---|---|---|
| Asset | Asset type | Location | Buyer | Vendor | Size | Price (mln) | Key facts |
| community property portfolio | public | Nordics | Public Property Invest (PPI) | Swedish SBB | 744 properties | €2900 | The portfolio comprises 144 properties in Finland and almost 600 properties in Sweden, Norway and Denmark. |
| Thales sites | office | Vélizy-Meudon, France | Covivio, Blue Owl Capital | Covivio | 126,000m2 | €503 | Covivio will retain 51% of the sites. |
| Marignan building | office | Paris | Bain Capital and Revcap | Icade | 12,000m2 | €402 | Icade had secured the refurbishment project by completing the vacating of the building and obtaining government permits. |
| Warwick Court | mixed | London | Daibiru | Mitsubishi Estate | 206,000sqft | £300 (€346) | This marks the Japanese investor’s second project in the UK, following the acquisition of “Capital House” in June last year. |
| two resi assets | living | Madrid and Barcelona | M&G Real Estate | NA | 1,000 units | €239 | The assets will provide affordable resi units and beds for students. |
| Casa Moncler | office | Milan | The Valesco Group | Covivio | 38,000m2 | €200 | Moncler has signed a 15-year inflation-linked lease without breaks. |
| 16-asset grocery and discount retail portfolio | retail | Sweden | Svenska | ABG Fastena | 72,557m2 | €148 | Almost half of the rental income is generated from the grocery retailers Coop Sverige and Axfood. |
| two office buildings | office | Copenhagen | PensionDanmark | Skanska | 19,500m2 | €139 (SEK1500) | The building at Ørestads Boulevard 41, was constructed in 2018 as the headquarters for Sweco Denmark while the building at Ørestads Boulevard 45 is primarily leased to Norlys. |
| Torres Sevilla | mixed | Seville | Argis | Caixabank | 100,000m2 | €130 | The building integrates a mix of offices, hotel, retail, and urban spaces, with a current occupancy rate above 95%. |
| 458-home portfolio | living | Denmark | Velkomn | ArthaScope | 44,500m2 | €130 | The assets are located in the Danish municipalities of Odense, Vejle, Kolding, Fredericia, Odder, and Middelfart. |
| single-home portfolio | living | UK | Brickland | NA | 340homes | £110 (€127) | The firm has acquired a mix of two-, three- and four-bedroom properties aimed at the mid-market. |
| multi-family portfolio | living | London | Principal | NA | 130homes | £100+ (€115) | The firm has forward-funded the acquisition of 130 residential units in Earlsfield, and it has bought a 66-unit resi building in Clapham. |
| three supermarkets | retail | UK | Supermarket Income REIT | NA | 200,000sqft | £98 (€112) | The deal was completed at a yield of 5.5%. |
| six care homes | living | Continental Europe | Aedifica | NA | 640beds | €110 | The firm is forward funding three projects in Belgium and Ireland and acquiring three trading care properties in Germany and the Netherlands. |
| Project Galaxy | living | Dublin & Galway | Greystar | EQT | 700beds | €105 | Greystar will operate the schemes under its own Canvas brand. |
| resi portfolio | living | Southern Germany | Patrizia | BPD and HKPE | 21,500m2 | €100 | Patrizia is securing 237 new-build rental apartments through the deal. |
| five-strong portfolio | logistics | UK | TPG Real Estate | CBRE IM | NA | £85 (€98) | The portfolio includes the Silverwing Industrial Estate in Croydon. |
| via Bassano Porrone 6 | office | Milan | Family office | Kryalos Sgr | 5,500m2 | €84 | The asset was bought five years earlier for €40m. |
| Ørestads Boulevard 31 | mixed | Copenhagen | Urban Partners | Skanska | 13,100m2 | €83 (SEK890) | The complex will comprise 210 residential units and 143 hotel rooms. |
| Spring Gardens site | office | London | London Square | CLS | NA | €80 (£70) | The site, currently occupied by office space, will be redeveloped into a residential-led scheme, subject to planning approval. |
| resi portfolio | living | Espoo | Storebrand | Citycon and Toivo | 376 apartments | €80 | The acquisitions were carried out through the Storebrand Nordic Real Estate II Fund. |
| three industrial projects | logistics | UK | Feldberg Capital, HBD | NA | 262,000sqft | £56 (€64.6) | The Origin platform was launched in December 2024 to develop £1bn worth of UK industrial and logistics assets, with Feldberg owning a 75% stake in the joint venture. |
| Sterrenburg | retail | Dordrecht, the Netherlands | Pertinea fund | Wereldhave | NA | €60 | The sale reflects the book value of the asset. |
| 10 South Crescent | mixed | London | GPE | City of London Corporation | 72,605sqft | £51 (€59) | The asset is set to be repositioned as a decarbonised office and retail asset. |
| logistics asset | logistics | Le Havre | WDP | AG Real Estate | 65,000m2 | €58 | Sale of the fully let asset generates a 6.0% NOI yield. |
| Via Paleocapa 7 | office | Milan | Coima Sgr | NA | 13,500m2 | €54 | The buyer is investing roughly €100m into the purchase and redevelopment of the office asset. |
| Panattoni Park Koluszki | logistics | Poland | DL Invest | Panattoni | 40,500m2 | €29 | The asset is fully leased. |
| Gerling Garden building complex | mixed | Cologne | Deka Immobilien | Quantum and Proximus | 18,800m2 | NA | The office buildings are leased on a long-term basis and almost entirely. |
| logistics portfolio of 31 assets | logistics | France and the UK | Oxford Properties and AustralianSuper | Blackstone | 2.4m sqft | NA | The urban infill and mid-box logistics assets are located in Manchester, Leeds, Milton Keynes, Paris and Lyon. |
| Hoxton Poblenou hotel | hotel | Barcelona | Partners Group and Trinity | Norlake Hospitality | 240 rooms | NA | The latest transaction marks the fourth joint investment between Partners Group and Trinity Investments. |
| last-mile logistics asset | logistics | Fiumicino, Italy | Kryalos SGR and Crossbay | LF1 | 52,000m2 | NA | The transaction was completed through the Bay Fund, Crossbay’s Italian investment platform, which holds 9 assets in its portfolio. |
| Panattoni Park Ruda Śląska IV | logistics | Poland | RYSY Properties | Panattoni | 32,000m2 | NA | The facility is leased to Solo midocean, a European leader in customized promotional products. |
| 12 assets | healthcare | UK | NA | Athena Healthcare | 12 care homes | NA | The assets comprise six active elderly care properties with six additional sites under construction, the majority being across the North West of England. |
| The Potteries shopping centre | retail | Stoke-on-Trent | Belgate Estates | XPE Group | 630,000sqft | NA | The centre also incorporates a dedicated leisure quarter known as The Hive. |
| resi portfolio | living | Western Germany | Greykite, Arax Properties | NA | 1,600 units | NA | The 134-asset portfolio will seed Baunest, Greykite’s new German residential platform, which is targeting over €500m of investment in the next 12-18 months. |
| freehold site | living | Swindon, UK | Vistry | Hallam Land | 366 resi units | NA | The disposal delivered an ungeared internal rate of return of 9.2% p.a. |
| office building | office | Nootdorp, The Netherlands | Clarion Partners Europe | Fugro | 10,404m2 | NA | The recently developed property is fully let on a 20-year triple-net lease to Fugro. |
| 2Up | logistics | Munich-Schwaig and Donauwörth, Germany | Starwood Capital | Wealthcap Immobilienfonds Deutschland | 69,000m2 | NA | Both properties are fully let. |
| Olympic Lagoon Resorts Pahos | hotel | Cyprus | Hotel Investment Partners | Amathus and Kanika | 276 rooms | NA | The deal is HIP’s first acquisition in Cyprus. |
| shopping centre portfolio | retail | Poland | Adventum Penta Fund | Auchan Polska and Ceetrus | 8 assets | NA | Auchan will remain the anchor tenant of the assets. |
| Senator office building | office | Warsaw | Cornerstone IM, Fidera | Union Investment Real Estate | 22,000m2 | NA | The asset is located in the centre of Warsaw. |
| Casamassima | retail | Puglia, Italy | Klépierre | NA | 100,000m2 | NA | The mall records an annual footfall of 7.5 million. |
| Assets on the market | |||||||
|---|---|---|---|---|---|---|---|
| Asset | Asset type | Location | Vendor | Size | Price (mln) | Broker | Key facts |
| Brighton Palace Pier | mixed | Brighton & Hove, UK | The Brighton Pier Group | NA | NA | Knight Frank | The Brighton Pier Group bought it for £18m in 2016. |
| Recently completed loans | ||||
|---|---|---|---|---|
| Lender(s) | Borrower(s) | Asset(s) | Loan Size (mln) | Key facts |
| Goldman Sachs | Kennedy Wilson and Canada Pension Plan Investment Board | UK single family housing portfolio | £500 (€571) | The new five-year mortgage facility will finance the joint venture’s rental housing portfolio and pipeline. |
| Deutsche Bank | Oaktree and Ronan consortium | Dublin’s Glass Bottle development | €415 | The facility replaces the existing loan. |
| PKO Bank Polski and ING Bank Śląski | Kajima Properties Europe | Student Depot portfolio | €183 | The five-year facility will refinance 10 existing Student Depot assets and provide funding for the development of new assets. |
| Nomura | YTL | Bristol’s Brabazon project | £119 (€136) | The loan will fund a student accommodation scheme. |
| Sumitomo Bank | ICG | Lidl portfolio | €120 | The facility finances the acquisition of a portfolio of Lidl supermarkets in the UK. |
| Hamburger Sparkasse | iQ Spaces and UBS AM | Berlin Cell and Gene Therapies life science campus | €100 | The asset is partly pre-let. |
| BNP Paribas | The Valesco Group | Casa Moncler in Milan | €80 | The green loan facility reflects at a record low margin for the Milan commercial real estate market. |
| Aareal Bank | Westwind Capital | London BTR portfolio | £73 (€84) | The portfolio, comprising 300 homes, is currently 95% occupied and was acquired by Westwind in mid-2024. |
| The Royal Bank of Scotland, the Bank of Scotland and Santander UK | Regional REIT | Portfolio | £72 (€83) | The three-year extension refinances a facility which was due to mature in August 2026. |
| Unicredit | Akno Group | logistics centre in Fiorenzuola D’Arda, Italy | €77 | The loan will fund the development of the project. |
| Sumitomo Mitsui Trust Bank | Edge and Mitsubishi Estate London | EDGE Shaftesbury scheme | NA | The new funding enables works to start on the £550m project in early 2026. |
| New mandates/JVs and funds on the market | |||
|---|---|---|---|
| Firm | Fund/mandate/JV | Strategy | Details |
| Canada Pension Plan Investment Board and Goodman | Goodman European Data Centre Development Partnership | Developing a portfolio of data centre projects in Frankfurt, Amsterdam and Paris. | The two equal partners are committing a total of €8bn to the partnership. |
| Fiera Real Estate and Universities Superannuation Scheme (USS) | UK-focused industrial platform | Developing prime small-to-mid-box industrial properties in strategically located urban locations. | USS is believed to be investing around £500m (€577m) in the joint venture, which has an initial term of 5 years. |
| KKR and Oak Hill Capital | European data centre platform GTC | Building a European data centre network | KKR is making an additional $1.5bn equity commitment to GTR while Oak Hill Capital will join as an investor committing $400m. |
