Ilmarinen takes 50% stake in €300m+ Brussels tower

Finnish pension fund Ilmarinen has further diversified its portfolio internationally with an investment in the Covent Garden office tower in Brussels' city centre.

Ilmarinen said it has taken 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 is joining a group of institutional investors led by Hannover Leasing which originally took control of the 72,000 m2 office asset in late 2014. The vendor, London-based private equity investor Evans Randall had bought the asset in October 2007 from its developer Immobiliere du Royal Rogier for €272 mln.

Although financial details were not disclosed, the asset is believed to be worth well over €300 mln.

The property comprises a low-rise, nine-floor building and a high-rise, 26-floor building, both connected on the ground floor by an atrium with a glass roof, and a three-level underground parking garage and archive spaces. The office space is fully occupied by the European Commission and several of its agencies on a long-term basis. The two elements of the asset provide a net yield of 4.95% and 5.5% respectively for the low-rise and the high-rise part.

'We were offered an excellent opportunity to carry out the investment together with another strong institutional investor. The investment strengthens Ilmarinen’s position in the Brussels office property market,' said Mikko Antila, the portfolio manager in charge of Ilmarinen’s international real estate investments.

The investment was structured by Hannover Leasing Investment, which is also responsible for managing the investment.

Earlier this year Ilmarinen invested in a company that owns the Bastion Tower office property in the centre of Brussels. Schroder Real Estate Investment Management completed the acquisition of the 100-metre high tower on behalf of Ilmarinen.

The vendors were CBRE Global Investors, acting on behalf of the CBRE European Office Fund and the Investa Office Fund.

Bastion Tower comprises 35,000 m2 over 26 storeys and is located on the Place du Champ de Mars in Brussels' European District. Tenants include law firm Freshfields Bruckhaus Deringer, recruitment firm Michael Page International and the Austrian embassy.