• Transaction / Assets
    AEW Buys Building in Madrid’s Río 55 Complex
  • Seller
  • Buyer
    AEW Europe Value Investors Fund
  • € MM

AEW Buys Building in Madrid’s Río 55 Complex

24 March 2018 – ProOrbyt Expansion

Insur, a subsidiary of the French corporate investment company Natixis, acquired one of the properties under construction in the Rio 55 complex, in Madrid.

The fund manager AEW, which manages Natixis’ real estate investments, has concluded a new acquisition in Spain. Through its AEW Europe Value Investors Fund, the investment manager purchased one of the two buildings that make up the Rio 55 complex, the office project that Inmobiliaria del Sur (Insur) is developing in Virgen del Puerto, alongside the Madrid Río area, in Spain’s capital.

The property, called Edificio Sur, is part of an approximately 28,000-square-meter complex that is under construction by Inmobiliaria del Sur. In September 2016, Insur, through a partnership with other minority shareholders, agreed to purchase the site in the southeast of the city from Sareb. After a year of negotiations, the 14,000-square-meter property was sold for 20 million euros. In total, the investment in the project will amount to €59 million.

The sale of the Edifício Sur, which has about 13,000 square meters of offices and another 1,000 of retail space, and more than 200 parking spaces, will bring in €43 million to Insur’s coffers. AEW acquired the property through its AEW Europe Value Investors (EVI) fund, which specialises in assets where the current profile or positioning can be enhanced through active asset management strategies. The fund raised €410 million, of which 93% has already been invested throughout Europe, and now the firm is working on the launch of EVI 2. “This acquisition of Rio 55 is completely in line with the strategy of the AEW Europe Value Investors fund. This high-quality development is in a strong location where the outlook for rental growth continues to strengthen,” Carsten Czarnetzki, Country Head for Spain, stated.

AEW first arrived in Spain in 2002. Three years ago, it returned to the market to pursue “strategic purchases” and, in 2017, opened an office in Madrid in one of the buildings it had already acquired: Serrano 240. It also has another office building, on Francisco Silvela, which was the firm’s last purchase in Spain before the current acquisition: ” We continue to explore opportunities to grow our investment in Spain, which is experiencing strong economic growth prospects.”

On the other hand, Inmobiliaria del Sur plans to introduce a motion at its shareholders’ meeting, scheduled for April 27, to vote on the creation of a new company, wholly owned by Insur. The company would transfer part of its portfolio of buildings for rent to a new company called Insur Patrimonial.

The company has a portfolio valued at €424 million, as of December 2017, of which €297.2 million correspond to its real estate business. Within this portfolio, the company owns 118,240 square meters of offices and commercial premises, and more than 2,500 parking spaces. Seville is the location of 84% of the company’s portfolio, while Madrid accounts for 2%.

Original Story: ProOrbyt Expansion – Rocío Ruiz

Translation: Richard Turner