M&G Real Estate has almost doubled its holdings in the Nordics following the acquisition of an office asset in central Stockholm for €230 mln.
The global real estate fund manager acquired the leasehold of the office scheme at Blekholmen 1 in the Swedish capital on behalf of its core European property strategy, managed by David Jackson and Simon Ellis.
M&G Investments is asset manager of UK-based insurer Prudential Plc. The vendor was Niam, a Nordic private equity real estate firm.
Located next to Stockholm's Central Station, the 34,000 m2 building is multi-let to 30 tenants and has recently undergone significant refurbishment.
The deal marks M&G Real Estate's largest single continental European acquisition, surpassing the €208 mln acquisition of Market Central Da Vinci in Rome, a joint venture with GWM Group, announced earlier in the year.
M&G Real Estate's existing portfolio in Sweden comprises of 44,400 m2 of assets across the office, logistics and retail sectors, collectively valued at €83 mln. Including assets in Denmark and Finland, M&G real Estate's existing portfolio in the Nordics region is valued €256 mln.
David Jackson, fund manager at M&G Real Estate, said: 'This deal in Stockholm's Central Business District is now our fund’s single largest acquisition to date, again considerably increasing our average transaction size. We continue to raise and deploy significant capital, targeting major European cities where prime assets in core locations benefit from strong rental growth and give our investors long-term income driven returns.'
In August, M&G Real Estate announced that it had appointed Thorsten Slytå to manage Nordic assets, and support the investment ambitions of the business in the Nordic region.
Slytå commented: 'Against the backdrop of Stockholm's buoyant economy and office real estate market, demonstrated by the sector’s low vacancy rate of 3%, rental growth is being pushed upwards and investor appetite remains strong for core assets. Blekholmen 1 provided a unique investment opportunity for our investors seeking access to this well-established market.'
Including this latest acquisition, the European core property strategy has deployed over €1 bn of capital since March 2015, with acquisitions also made in Italy, Spain, Denmark, Germany, Portugal and France.
