Real estate investment manager Barings has acquired an office in Stockholm, Sweden from local firm BLDG Holding for €72 mln in an off-market deal.
Skvalberget 33, a 6,185 m2 property in Stockholm's CBD, was acquired on behalf of institutional investors.
Gunther Deutsch, head of real estate transactions Europe at Barings, said: 'While a large proportion of the world’s office staff have been working from home successfully over the last few months as a result of government-enforced lockdowns, we firmly believe that, for many reasons, offices will continue to play a vital role for all businesses, particularly in relation to fostering culture, improving collaboration and creativity, as well as nurturing and attracting talent.
'We believe that in a post Covid-19 world, demand will more than ever be focused on brand new or newly refurbished offices in CBD locations that offer flexibility of workspace, as well as strong technological and sustainability credentials.'
The eight-storey building is fully let to four tenants on leases comprising an average of 2.6 years to break, and is currently significantly under-rented, according to Barings.
Current occupiers include Academic Work, Meltwater and Stratsys. The fourth tenant, Beckmans Design School, which occupies three floors, has indicated that it intends to exercise its lease break in 2.5 years, presenting an opportunity to upgrade this space, as part of a wider asset management plan, and capture reversion.
Barings also intends to upgrade the entrance hall and communal facilities, including changing rooms and bicycle storage. Subject to planning, the firm said it had also identified the potential to increase the asset’s total lettable area, by developing additional office space of 3,500 m2 on the courtyard, as well as converting the attic space into a further 400 m2 of office space whilst also creating an outside roof terrace.
Thorsten Slytå, head of Scandinavia at Barings, added: 'Given the fierce competition within the value add segment, we are extremely proud to be able to source an off market acquisition like this.
'Each year only a handful of assets are traded in the Eastern part of the CBD, the most attractive part of the city. Stockholm remains one of the world’s top cities for business, innovation and quality of life.'
The deal grows Barings’ portfolio in Scandinavia to approximately 170,000 m2 across a range of sectors including offices, logistics, retail and residential.
Deutsch concluded: 'At a time when many deals are being cancelled or delayed due to Covid-19 travel restrictions, this transaction, as well as our recently announced acquisition of a Swedish sale-&-leaseback logistics portfolio, clearly demonstrate how Barings’ local office network affords us a real competitive advantage at this current time.
'With feet on the ground in our target eight countries across Europe and €1 bn of transactions currently in the pipeline we can thoroughly assess investment opportunities firsthand, allowing us to provide the speed and certainty of execution that are so important to vendors.'
