Varma, Finland’s biggest pension insurance company, has signed a deal to buy its first office asset in Helsinki’s central business district (CBD).

It acquired the asset for €41m from Finnish financial group Fennia.

Ilkka Tomperi, investment director for real estate, told IPE Real Assets: “This is the first CBD office asset owned by Varma and it is an important addition to our direct real estate portfolio.”

The prime office building offers potential tenants a combination of a classical building facade and flexible office space, Varma said.

Tomperi said the building had been going through a major refurbishment, which Varma would now conclude. Leasing of the mostly vacant building would start immediately, he said.

“We were encouraged to make the acquisition as our leasing performance in the neighbouring Kamppi area in Central Helsinki has been very good during the past 12 months, including getting the newly redeveloped Lönnrotinkatu 18 fully leased ahead of the completion,” he said.

The older part of the building was constructed in 1884 with the extension built in 1977. It is located on the corner of Eteläesplanadi and Fabianinkatu and has around 5,400sqm of leaseable office and retail space plus about 1,300sqm of meeting and other shared facilities. 

Until now, despite being such a large Finnish investor, Varma has owned no office assets in the CBD area, unlike many of its counterparts, including Sponda, Ilmarinen, and KEVA.

Tomperi explained that in Helsinki, as in many other cities, office demand in the best locations — whether in the CBD or elsewhere near good public communications — had grown at the expense of business parks and suburban offices without rail links or direct exposure to urban neighbourhoods.

“In our current strategy, we have focused on owning assets that are in excellent locations, and as Varma is one of the largest property owners in Finland we also feel that we wanted to fill our offering with a prime CBD location that we have previously missed,” he said.

Varma owns a number of office assets in Western Central Helsinki, including the headquarters of European Chemicals Agency ECHA on Annankatu.