AXA Real Estate makes Spanish market comeback

AXA Real Estate Investment Managers has clinched its first office acquisition in Spain since the onset of the financial crisis six years ago.

The French asset manager has agreed to acquire a portfolio of up to 13 government-let office buildings in Barcelona, as part of a sale-and-leaseback transaction with local authority Generalitat de Catalunya for €172 mln.

The acquisition of 11 of the properties is expected to complete on Friday, 28 June 2013, while the remaining two are subject to further due diligence and expected to close in the middle of July. The deal was made on behalf of AXA insurance companies.

Under the terms of the transaction, the Catalunya local authorities will continue to occupy the buildings, having signed a new 20-year lease providing a total annual rent of €16.2 mln.

The office buildings are all located in the central business district or city centre of Barcelona and comprise a total floor area of over 105,000 m2, including parking and storage. AXA Real Estate won a competitive public tender process to acquire the portfolio.

Following the acquisition, AXA Real Estate will manage a €1.3 bn portfolio of assets in Spain, of which €540 mln are in Barcelona.

Pierre Vaquier, CEO of AXA Real Estate, said the company has been actively looking to make acquisitions in the Spanish real estate market since the beginning of the year after signs that the risk of a eurozone break-up had abated.

‘The acquisition of the Generalitat portfolio is typical of the type of value-add transaction we want to undertake, being core quality offices that are well located within a major city and let on long leases to strong, preferably government backed, tenants, but which offer the potential for capital appreciation given the early stage of Spain’s recovery,’ he added.

The portfolio is one of a string of real estate packages recently put on the market by the Spanish public authorities. Earlier this week, the muncipality of Madrid sold the head office of its urban planning department for some €65 mln.

Similarly, US-based opportunity investor Blackstone is rumoured to have acquired a portfolio of 1,800 social housing units for €120 mln. The properties were sold through public bidding process by the Spanish capital city.