KGAL enters Spanish real estate market with Torre Esteve deal
KGAL Investment Management GmbH & Co. KG has entered the Spanish real estate market by acquiring the Torre Esteve office building in Barcelona.
Drawn by the city's strong startup sector, KGAL said it expects rents to rise due to a lack of modern space in central parts of Barcelona.
The Torre Esteve building was acquired on behalf of a pan European real estate AIF from Iberdrola Inmobiliaria S.A., a wholly owned subsidiary of the Spanish power generation company Iberdrola.
Barcelona has been developing into an attractive office, hotel and residential location for several years and is one of the most dynamic office real estate markets in Southern Europe.
Having attracted approximately 1,300 registered startups in 2018, the city has become Europe’s fifth largest startup hub after London, Berlin, Paris and Amsterdam. The combination of a declining vacancy rate, rising prime rents and a positively developing economy characterise the Barcelona office market, KGAL said in a statement.
“Barcelona has developed into a high-tech location in recent years. With the change in economic structures, Barcelona has also become more attractive to us as a foreign investor,” explains André Zücker, Managing Director of KGAL Investment Management GmbH & Co. KG with responsibility for the real estate asset class, the decision to acquire Torre Esteve. “Due to the lack of available modern office space in the central districts, we also expect rents to rise.”
Built in 2017 the Torre Esteve building is a multi-tenant property with a total area of 19,400 square metres of office and restaurant space over 14 upper floors.
More than 60 percent of the space is leased to Esteve, the namesake Spanish international pharmaceutical company with a strong credit rating, while the second-largest tenant is the Spanish Registry Office. Due to the high quality of construction and fit-out, the property was awarded a BREEAM rating of very good.
Colliers (brokerage and rental appraisal), Hill International (technical appraisal) and DLA Piper Spain and NOMOS (legal and tax advice) acted as advisers in the transaction.