Finnish-Korean consortium acquires Helsinki office complex for €480m

A consortium of Finnish and South Korean institutional investors have acquired an office campus in Helsinki through a €480m sale and leaseback.

Finland’s Varma Mutual Pension Insurance Company and South Korea’s NH Investment and Securities (NHIS), and Shinhan Investment Corporation have bought the headquarters of OP Cooperative, OP Financial Group’s central cooperative, in the Vallila neighbourhood of Helsinki.

It is the largest ever single-asset office transaction in Finland and the first Finnish office acquisition by South Korean investors.

The consortium was led by Seoul-based AIP Asset Management and Helsinki-based Avant Asset Management, who act as co-investment managers for the deal.

The campus has 74,150sqm of lettable area and is the largest single office complex in Finland, accommodating approximately 6,000 employees.

OP Financial Group, which was advised by CBRE on the transaction, will continue to operate the property under a long-term lease agreement.

Markku Mäkiaho, who is responsible for OP’s real estate investments, said: “The preparations for this project started in October 2018 and, given the exceptionally large investment volume for a Finnish office asset, it was clear from the start that the investor universe is to be approached globally.

“CBRE’s extensive network and support received from the European and Asian offices during the process were instrumental in building understanding of investors’ business practices and culture.”

Henrik Calton, head of investment properties at CBRE Finland, said: “The weight of global capital targeting the Helsinki office market is significant and liquidity is at an all-time high, as evidenced by this record-sized transaction.

“This highly competitive process was a true collaboration across several regions resulting in a new investor entering the Finnish market.”

Ilkka Tomperi, head of real estate at Varma, said: ”Long-term stable cash flow suits well into our portfolio in today’s low interest-rate environment.

“The large high-quality asset in the middle of the growing and developing Kalasatama–Pasila axis is in line with our strategy to focus in attractive locations with excellent public transport connections.

“Whee are investing into real estate directly and indirectly via funds and JVs. Teaming up with other like-minded investors like NHIS and Shinhan enables us to access a large asset like the Vallila campus.

“We have used JVs across Europe to invest in office and retail assets like Taunus Turm in Frankfurt and Skärholmen Centrum in Stockholm.”

Danny Kim, CEO of AIP said: “The acquisition of the OP campus represents a strong continuation of our strategy to diversify into the Nordics after our purchase of the Novo Nordisk property in Copenhagen, Denmark last year, which was the first office acquisition in the Nordics by South Korean investors.”

“We have tremendous confidence in the Helsinki market for a number of reasons, including the comparatively attractive yields, strong liquidity, and transparent business environment. Going forward, we will continue to focus on acquiring properties in the Nordics as well as in select other European cities.”