UBS Asset Management has acquired a prime office building in Madrid for €52m on behalf of Italian insurer Zurich Investments Life.

The 7,000sqm, grade-A office building at Calle Principe de Vergara 108 was acquired from Blackstone for the UBS (I) Zurich Italy – Real Estate Fund (UBS-ZIREF), a pan-European vehicle set up for the Italian subsidiary of Zurich Insurance Group in 2016.

The 12-floor tower has a panoramic external lift and is part of the skyline of the Salamanca office district.

The UBS-ZIREF fund made three acquisitions during the COVID-19 pandemic in Paris, Lyon and Madrid, for about €130m. In July, it acquired a Paris office for €43m.

Gaetano Lepore, portfolio manager for UBS-ZIREF at UBS AM Real Estate & Private Markets, said: “This acquisition, perfectly in line with our investment strategy of targeting well located, high quality assets in major European cities, allows us to build on our successful track with seven acquisitions in the last 18 months and to reach circa €570m AUM.”

He added: “With attractive occupational costs and capital values significantly below the average market level in the last three years and a well-diversified tenant mix, with a number of imminent rent re-gears, the property is a highly defensive investment with a guaranteed short-term income growth.”

Giorgio Pieralli, head of illiquid assets at Zurich, said: “In this peculiar year we have been active real estate investors in various markets. We have paid great attention to the sustainability and well-being component of each investment.

“The effects of the pandemic will not be penalising office buildings that can offer adequate distribution of space and cognitive and emotional well-being to final users.

“The relevance of the elements of environmental sustainability is a characteristic of our property investment approach. The limitation of carbon emissions and energy consumption in real estate portfolios contributes to the achievement of the group’s targets. We are convinced that this strategy can help to stabilise the returns of our portfolios for the benefit of our clients and shareholders.”