GERMANY - An office building in Madrid is the latest property purchase for the Bayerische Versorgungskammer (BVK) pension fund in Germany.

In recent weeks, the €53bn Versorgungswerk for self-employed professionals such as doctors, lawyers and notaries in the German province of Bavaria has made several forays into the asset class, including a fund of funds that will invest in BRICS, a loan for a real estate deal and several purchases for existing funds including a property in Prague.
In its search for sustainable yields in the real estate sector, the fund has now added a Spanish office building to its iii-BVK Spezialfonds, an individual fund managed by Invesco Real Estate.

The 'Titán' office high-rise just 10 minutes outside of Madrid city centre is fully let to ADIF, a Spanish railway operator, until 2016.

The BVK managed to avoid Spain in its fixed income portfolio, but, in the property space, it followed Invesco's advice on the opportunities in the southern European country. 

Bettina Knirsch, director of fund management at Invesco Real Estate, pointed out that top real estate in top locations, with credit-worthy tenants and indexed rental agreements, could offer "good entry points" in Spain.

"Although the Spanish economy has to battle the consequences of the European debt crisis, there are opportunities in the Madrid real estate sector over the long term," she said, adding that this was a very rare opportunity to get a top property so close to the city centre.

According to Invesco, the initial gross yield on the deal was 6.9%, but the purchase price was not disclosed.