Germany's Union Investment has acquired the Urban Environment House office property development in Helsinki in one of the largest acquisitions it has ever carried out in Finland.
Located in the Kalasatama district of Helsinki, the asset was sold by the municipal authorities for a price of around €165 mln.
The deal is understood to be one of the biggest single-asset office transactions ever signed in Finland.
The property, which is currently under development, will comprise 27,500 m2 of rentable office space on completion in the spring of 2020.
The City of Helsinki has agreed to lease back the asset for its Urban Environment Division. The long-term lease will generate rental income of around €7.8 mln a year.
Finland's property investment market has blossomed over the past two years with transactional volumes coming in at over €10 bn last year, more than double the long-term average.
Foreign investors are driving the market, drawn by its long-term stability as well as by the recent restructuring of the economy. Another reason, experts say, is that the Finns have adopted the euro so there is not the currency risk associated with rival Nordic countries.
Recent newcomers to the market include US group Blackstone, which last year took over Helsinki-listed landlord Sponda in a €3.8 bn deal.
More recently, Round Hill Capital and Corpus Sireo both made their first Finnish forays while private equity group Kildare Partners announced plans to enter Finland with the launch of an all-cash takeover offer for office specialist Technopolis, valuing the firm at €730 mln.
Italian insurer Generali is also said to be on the lookout for investment in the country as well as Dutch pension fund PGGM, which earlier this year took a 5% share in Kojamo, a major residential property owner in the country. Kojamo - the owner of a €5 bn portfolio of over 35,000 units - went public in June in an IPO giving it a market cap of over €2 bn.
