Danish pension fund pulls off mega transaction in Brussels

Danish pension fund ATP has teamed up with AXA Real Estate to acquire the 151,000 m2 North Galaxy office complex in Brussels from listed property company Cofinimmo.

The value agreed between the parties for the building amounts to €475 mln. ATP Real Estate's share was €428 mln. The investment is the single largest direct real estate investment by ATP Real Estate outside Denmark, and the largest international single real estate investment by any Danish institutional investor.

North Galaxy is the head office of the Belgian Ministry of Finance in Brussels. Based on a passing rent in 2014 of €27 mln (€229/m2 of office space), the investment volume represents a gross yield of 5.64%. The facility counting 105,000 m2 of offices represents a value ratio of €4,524/m2 of office space.

The complex comprises two high-rises of 28 storeys each and a third six-storey building. It also includes 16,400 m2 of archives and 611 inside parking spaces.

ATP EYES MORE
Michael Nielsen, CEO at ATP Real Estate said: 'This is an attractive investment for ATP Real Estate as it matches ATP’s wish for long and stable cash flows from well-located properties with low risk. We have previously announced, that ATP Real Estate will increase its focus on this type of real estate assets in both Denmark and internationally. The investment shows that we are executing on this plan.'

AXA Belgium joined in with AXA Real Estate in the transaction. Pierre Vaquier, CEO at AXA Real Estate, added: 'This is a key transaction for AXA Real Estate this year and it marks the beginning of a new and long-term partnership that we have been able to facilitate for our clients. We are pleased to welcome ATP as a new client and that they chose AXA Real Estate because of their confidence in our ability to deliver value thanks to our strong local team.'

AXA Real Estate will carry out management for the property.

DEBT REDUCTION
The investment volume represents a 22% premium on what Brussels-listed Cofinimmo paid to acquire the property in 2005. However, the sale price of 100% of the shares of the building holding company, Galaxy Properties SA/NV, amounts to €7 mln; the difference between this and the agreed value of the building mainly consists of debt taken over by the buyers.

Cofinimmo said that the exit yield comes to 5.64%, compared to the 2005 acquisition yield of 6.1875%. The company was advised by Goldman Sachs on the transaction.

ATP has 4.8 million members and total assets of €83 bn. ATP’s real estate investments amount to more than €4 bn.

According to PropertyEU's ranking of Top Investors, AXA Real Estate is the leading real estate portfolio and asset manager in Europe with over €45 bn of assets under management. In Belgium, it manages over €3 bn of real estate assets.

Cofinimmo also announced the restructuring of certain interest rate hedges relating to the period 2014-2017, for a notional amount of €600 mln. The company owns a property portfolio worth over €3.1 bn, representing a total area of 1,755,000 m2.