PGIM Real Estate has completed the acquisition of three centrally located office properties in Amsterdam, Paris and London, on behalf of its European core strategy. Financial details were not disclosed.
With these acquisitions, PGIM Real Estate’s European core strategy increases its exposure to European office by continuing to allocate strategically to ‘winning cities’ which are experiencing steady population growth and increasing affluence, attracting capital and skilled workforces, the company said in a statement.
Moreover, these acquisitions demonstrate a wider theme at play across the strategy’s office portfolio of targeting rapidly developing ‘live-work-play’ submarkets that have demonstrated sustained rental growth. Typically these submarkets attract young professionals looking for vibrant communities, often present within the city tech clusters.
Christine Fritz, co-portfolio manager of the European core strategy at PGIM Real Estate, commented: ‘Despite mainstream sentiment, many prime continental European office markets have seen steady rental growth throughout the last 24 months. With expected positive recovery across European economies, we see demand for prime offices stabilising and continued decline in office vacancy rates.’
She added: ‘As we focus on submarkets with innovation and technology clusters, the locations for these acquisitions were key to the investments. Tech hubs in European cities are continuing to benefit from a growing workforce, as demand remains strong for tech jobs, and workers drawn by dynamic and vibrant locations. These locations, therefore, benefit from attracting leading global tenants, thus maintaining sustained rental growth and low vacancy rates. Moreover, each office property has strong existing fundamentals with contemporary features, which combined with our focus on improving ESG-credentials, means we see a clear pathway to enhance value across these investments.’
Amsterdam
The office in Amsterdam, the Warehouse, is a fully let 6,983 m2 Grade A office building located in the heart of the city. It is fully occupied by a single tenant, a leading software company. This historic property was extensively refurbished to a very high standard in 2017, achieving a BREEAM ‘very good’ certification, and is already operating close to net zero carbon.
Paris
The Paris office is a fully let 2,899 m2 building located on Rue de Taitbout, near the Opéra in the 9th arrondissement, which was historically home to many large financial institutions and international organisations but is now also the epicentre of the French tech scene. The building has a BREEAM In Use ‘good’ certification.
London
The London property, C-Space, is a fully let 5,757 m2 building on the north-east of the City of London, which straddles the traditional banking and finance area of the City, as well as the start-up, tech and creative hub of Old Street/Shoreditch – commonly referred to as the ‘Silicon Roundabout’. The building has a BREEAM ‘very good’ rating, with a clear identified pathway for the building to be net zero carbon ready from an operational perspective.
