Finnish insurer Ilmarinen has completed its first real estate investment in Germany in the next stage of its strategy to expand its direct property holdings beyond its domestic market.
Finnish insurer Ilmarinen has completed its first real estate investment in Germany in the next stage of its strategy to expand its direct property holdings beyond its domestic market.
Ilmarinen said on Thursday that it has acquired an office and hotel property in the German capital through a 50:50 joint venture structure 'with a French institutional investor'.
The investment volume was not disclosed.
The modern Königstadt Carree property, completed in 2011, is located centrally, close to Alexanderplatz. The property consists of a 21-storey office tower and an 8-storey hotel building. The lettable area totals 26,000 m2. There are a dozen office tenants, including Mercedes Benz Bank. The Ibis-branded hotel is operated by Accor.
'Solvent tenants and long-term rental agreements make this a profitable and secure investment,' said Ilmarinen portfolio manager Mikko Antila.
Antila described Berlin as one of the most attractive real estate markets in Europe. 'Berlin has established itself as the European hub for creative industries and digital economy. That makes the city very attractive to real estate investors, too.'
'In addition, the vacancy rates of office premises in the city have decreased steadily and rent levels have remained stable,' he added.
Schroder Real Estate was Ilmarinen's adviser on the transaction and will asset manage the property.
Diversification
Ilmarinen is one of the largest institutional investors in the Finnish real estate market, but has begun diversifying its portfolio geographically through joint venture partnerships.
In October 2015 the insurer invested in the Covent Garden office tower in Brussels' city centre. Ilmarinen took a 50% stake in the Belgian company that owns the building, which is located a short walk from the Rogier metro station and Brussels’ shopping street, Rue Neuve.
The pension fund joined a group of institutional investors led by Hannover Leasing which originally took control of the 72,000 m2 office asset in late 2014. Although financial details were not disclosed, the asset is believed to be worth well over €300 mln.
Earlier this year, Ilmarinen - acting through Schroder REIT - invested in a company that owns the 100-metre Bastion Tower office property in the centre of Brussels.
Ilmarinen has also expanded its real estate investments into the Swedish market.
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Nordic Outlook
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A report on the Europe & Nordics Outlook briefing, hosted by Catella in Stockholm on 1 December, appears in the December edition of PropertyEU Magazine.
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