Aviva and LaSalle acquire office building in Prague for EUR84 million
Aviva Investors and LaSalle Investment Management have acquired River Garden II & III in Prague, Czech Republic, on behalf of the Pan-European Fund Encore+ for EUR84 million.
River Garden II & III, developed by HB Reavis, an internationally active real estate company, is a class-A office building with ground floor retail, located in the Karlin district of Prague.
This is the first acquisition that Encore+ has made in the Czech Republic.
River Garden II & III, which has recently been awarded a BREEAM Excellent certification award, gives Encore+ the opportunity to access high quality office space with a mixed tenant profile of both international and local companies on long leases. It also benefits from the strong and growing Czech economy with the second lowest unemployment rate in the EU.
Karlin is one of the most prominent, active and sought after office locations in Prague, located in an established and popular office and residential location close to the city centre. The property benefits from a number of excellent transportation connections (subway, trams and buses) within short walking distance.
Encore+ is a diversified, Continental European real estate fund which aims to deliver stable and growing income alongside long-term capital appreciation, from an actively-managed portfolio, in a monthly-dealt, open-ended fund structure. It was recently, for the second time, ranked by MSCI as the top performing fund on a three-year rolling basis in the IPD Pan-European Property Funds Balanced Funds Index (PEFPI).
The three-year return for the fund is more than 9 per cent (as at 30 September 2016).
The fund has been co-managed by Aviva Investors as fund manager and LaSalle Investment Management as asset manager for over 10 years, with LaSalle also being responsible for all deal sourcing for the fund.
Jeffrey King, fund manager of Encore+ at Aviva Investors, says: “This acquisition is evidence of our success using a disciplined investment approach while following our strategy to invest in quality assets in strong European locations. The Czech Republic is an attractive market thanks to strong and steady economic growth. The acquisition of River Garden II & III represents an excellent opportunity to acquire high quality office and retail space in an established submarket, and generate attractive risk adjusted returns for investors.”
Ian Williamson, portfolio manager at LaSalle Investment Management, says: “This asset follows the strategy to actively invest in well located Core+ offices across the Encore+ investable universe. This is a modern, high quality office building and the fund’s first Czech acquisition; this also makes it an excellent fit further diversifying the fund’s composition.”
Marian Herman, chief financial officer of HB Reavis, says: “Our strategy is to deliver well-designed, dynamic workspaces, with excellent amenities, in desirable locations. River Garden ll & lll provides all those vital aspects, which will ensure that the office building will remain an attractive and lucrative long-term investment for reputable companies such as LaSalle and Aviva Investors.”