UBS Asset Management acquires cEUR52m prime CBD Madrid office
UBS Asset Management (UBS-AM) Real Estate & Private Markets (REPM) business has acquired a prime office building in the centre of Madrid, Spain for a total of cEUR 52 million.
The property was purchased from real estate funds managed by Blackstone on behalf of the UBS (I) Zurich Italy – Real Estate Fund (UBS-ZIREF) and marks the first investment undertaken in the Spanish market as part of UBS-ZIREF’s European diversification strategy.
Calle Principe de Vergara 108 is a grade A office building with 7,000 sq m of space across 12 floors, with an additional four basement levels providing 69 parking spaces. This asset is currently fully occupied by a well-diversified tenant mix, comprising different sectors.
This highly visible tower with a panoramic external lift is part of the skyline of Salamanca Office District. Its high exposure to natural light at each level and efficient floor plates complete the sustainable, energy efficient appeal of this modern office estate.
During such a difficult period the UBS-ZIREF fund has completed three acquisitions in three different, vibrant locations in Paris, Lyon and Madrid, for an overall investment amount of EUR130 million.
The pan-European UBS-ZIREF fund is managed by UBS-AM and reserved to Zurich Investments Life SpA, an Italian fully-owned subsidiary of Zurich Insurance Group. The Fund is characterized by a core return profile, aiming to generate stable, diversified returns over the long-term. Investments are focused on high-quality office properties flows, situated in prime locations within selected key eurozone markets.
Gaetano Lepore, Portfolio Manager for UBS-ZIREF, Real Estate & Private Markets, says: “This acquisition, perfectly in line with our investment strategy of targeting well-located high quality assets in major European cities, allows us to build on our successful track with seven acquisitions in the last 18 months and to reach c. EUR 570 million AUM. Our UBS REPM team brilliantly executed, through a competitive process, an outstanding deal, especially given the scarcity of prime assets coming to the market in central Madrid.
“With attractive occupational costs and capital values significantly below the average market level in the last three years and a well-diversified tenant mix, with a number of imminent rent re-gears, the property is a highly defensive investment with a guaranteed short-term income growth. We are particularly satisfied to have secured for our investor, the Zurich Group, before the end of 2020, a further remarkable property in another top European office market such as Madrid.”
Giorgio Pieralli, Head of Illiquid Asset di Zurich Italia, says: “In this peculiar year we have been active real estate investors in various markets. We have paid great attention to the sustainability and well-being component of each investment. The effects of the pandemic will not be penalising office buildings that can offer adequate distribution of space and cognitive and emotional well-being to final users. The relevance of the elements of environmental sustainability is a characteristic of our property investment approach. The limitation of carbon emissions and energy consumption in real estate portfolios contributes to the achievement of the Group's targets. We are convinced that this strategy can help to stabilise the returns of our portfolios for the benefit of our clients and shareholders.”
UBS-AM was advised on this transaction by Cushman & Wakefield, Linklaters and Deerns. Blackstone was advised by JLL.