Starwood Capital Group has entered Luxembourg by acquiring a modern two-building office complex for €120 mln.
Starwood Capital Group has entered Luxembourg by acquiring a modern two-building office complex for €120 mln.
Delivered in 2009, the Vertigo complex is located in the heart of the Cloche D'or office district and was the first scheme in the city of Luxembourg to be awarded Haute Qualité Environnementale (HQE) sustainability certification.
Vertigo provides over 24,000 m2 of space arranged over the two buildings, Polaris and Noas. The existing tenants include Blackstone Group, Intertrust and Bank of New York Mellon. The transaction also includes zoned land to develop an additional 3,000 m2.
Starwood Global Opportunity Fund X (SOF X) completed the acquisition in mid-July.
Rynda Property Investors, the independent European asset and investment manager, partnered with the Starwood fund as a co-investor on the deal and will perform the asset management.
'We are delighted to start this relationship with Starwood Capital Group and to be co-investing alongside their capital,' said Rynda CEO Michael Walton. The business plan calls for the leasing up of the 18% of GLA which is currently vacant at a time when 'the supply of modern office space is drying up in Luxembourg City', he added.
The deal is the first joint venture between Starwood and Rynda and Walton said he hopes they can do more together. Rynda's platform covers France, Germany, the Netherlands and Luxembourg.
Starwood decided to enter the Luxembourg office market because it is at 'an attractive entry point in the occupier cycle', according to Zsolt Kohalmi, head of European acquisitions at Starwood Capital Group.
'This market already has sub-5% vacancy levels, and we believe that as more companies look to expand their operations in Luxembourg and the European Union increases its presence there, we will see further rental growth.'