AEW Europe acquires mixed-use asset in Madrid

AEW Europe has purchased 240 Serrano, a 7,550 m2 office led property in central Madrid for approximately €26 mln.

The asset, which is the second acquisition for the Europe Value Investors fund (EVI) in Madrid in as many months, has been acquired from Continental Property Investment, and brings the total value of assets in EVI to around €430 mln. Savills advised AEW Europe on the acquisition.

Carsten Czarnetzki, portfolio manager for EVI said: 'This is a strong asset in an excellent location that we are very pleased to have been able to secure off-market, demonstrating our growing presence in the Spanish market. The opportunity 240 Serrano presents plays well to our asset management strengths and skills. Spain’s economy has been growing for two years now and office take up is increasing, while office completions have fallen to their lowest levels since the mid-1990s. As a result, Madrid’s prime rents are beginning to grow, yet are still at a level which we believe makes Madrid look affordable.'

240 Serrano, which is currently 83% let, is a well-established asset in central Madrid, comprising eight floors above ground. There are seven floors of office space, as well as a vacant café and restaurant on the lower ground floor, a small bar at ground level and a basement, which is currently let to a luxury gym operator with a full range of facilities, including outdoor tennis courts. In addition, there is a 70-space underground car park.

240 Serrano is located in the Hispanoamerica area of the Spanish capital, an established office district, close to the AZCA business quarter and the main city artery of Paseo de la Castellana. Businesses in the immediate area include Sony, Canon, Aegon and Ferrovial, while Google, EY and Bloomberg are all also located nearby.

The fund manager aims to refurbish the office and restaurant areas and add new conference facilities. The business plan is to lease up the existing vacant space and take advantage of the reversionary rental upside against the background of a recovering occupier market in Madrid.

AEW Europe Value Investors targets value-add offices throughout Europe and has now deployed in excess of €430 mln across 13 assets.