UK and European specialist private equity real estate firm the Valesco Group has executed a €600 mln refinancing for the iconic Finance Tower in Brussels, on behalf of JR Global REIT, Korea’s largest independent REIT.
Finance Tower houses the ministries of finance and social security of the Belgian government, as well as offices of various government ministers.
The landmark transaction, executed with the existing consortium of blue-chip lenders, is Europe’s largest office refinancing since the global pandemic, reflecting the asset and submarket’s compelling real estate fundamentals.
The 142 metre tall Finance Tower, situated in the central business district of Brussels, is the largest commercial office complex in Belgium, providing 185,754 m2 of space over 36 floors.
Delivering an annualised rent roll of c.€70 mln, the asset is let for more than 10 years on an indexed linked basis without breaks to the Régie des Bâtiments, the Belgian Government buildings agency.
Given its mission critical appeal to the Belgian government, the Federal Police is also soon to be housed in the building, bringing an additional 1,260 employees onsite.
Finance Tower’s ESG credentials have been materially enhanced since Valesco and JR AMC acquired the asset, with the building now ranking in the top 15% of all European office buildings in terms of carbon emissions and energy consumption. It is also ranked in the top 1% of all offices in Brussels by BREEAM rating.
Finance Tower’s uncapped rental indexation provides future income growth from long dated secure government cash flow. The Brussels office market continues to show strong performance with office rents in the Brussels CBD’s Pentagon area, where the asset is located, having increased 23.6% over the last three years.
Shiraz Jiwa, founder and CEO of The Valesco Group, commented: ‘Finance Tower’s robust real estate and sustainability fundamentals, including its long-term government tenant profile, strong income growth prospects, and leading ESG credentials, has seen the asset perform with both resilience and exceptional strength, despite the uncertain geopolitical and macro-economic backdrop of recent years.
‘These fundamentals coupled with a highly aligned and committed set of stakeholders, all underpinned by a close-knit partnership between Valesco and JR AMC, has delivered a watershed moment for the European office market.’
Henry Jang, CEO of JR AMC, commented: ‘This landmark refinancing, achieved in close partnership with Valesco, not only highlights the resilience and strategic importance of Finance Tower but also reinforces our long-term commitment to sustainability.
‘Aligned with the EU’s sustainable finance and decarbonization agenda, we aim to further enhance the building’s strong environmental performance as part of our ongoing business strategy.
‘By building on its superior BREEAM rating and outstanding carbon and energy efficiency metrics, we strive to set new benchmarks for sustainable investment practices, ensuring Finance Tower remains a leader in ESG excellence within the European real estate market.’
Valesco and JR AMC were advised by Cushman & Wakefield and Clifford Chance.
