Catella makes acquisition in emerging Luxembourg district

OFFICES
Tim Harrup

As is normal each year, the real estate market is relatively inactive over the summer, which is why there are very few new articles on pro-realestate.be. However, the market is not totally asleep and when an item of interest arises, it will be brought to you. This is now the case with a significant transaction in Luxembourg, involving Catella.and will obtain BREAAM ‘Very Good’ certification. The tenants of the building are Parfinindus , Willemen International and SRB LUX.

The W4 office building in the Leudelange district to the southwest of Luxembourg City has been acquired under a single German pension fund mandate by Munich-headquartered Catella Real Estate in cooperation with Maastricht-based Catella Investment Management Benelux The property was purchased on behalf of the ‘AVW European Real Estate Fund’, a German institutional ‘Spezialfonds’ structure launched at the end of 2020. The seller of the asset, which is fully leased, is Parfinimmo S.A.and will obtain BREAAM ‘Very Good’ certification. The tenants of the building are Parfinindus , Willemen International and SRB LUX.

The W4 building is located at 17 rue Léon Laval L-3372 Leudelange, Luxembourg on the Am Bann Business Park and has a total gross lettable area of 4,955 m², including 4,519 m² of office space, 235 m² of retail and around 201 m² of storage space, spread over three upper and two basement floors. It also has 42 indoor and 37 outdoor parking spaces. The property was built in 2020 and will obtain BREAAM ‘Very Good’ certification. The tenants of the building are Parfinindus , Willemen International and SRB LUX.

Speaking of his company’s decision to make this purchase, Fabian Pick, Portfolio Manager at CREAG’s AVW European Real Estate Fund, said: “The W4 office building is a perfect match for the profile of the AVW fund investment mandate. It is a recently constructed sustainable office asset that also incorporates commercial space on the ground floor, providing a diverse tenant mix. The vendor in this deal, the ParFi Group, is also the main tenant, which means the building has been well maintained and managed by them as the current owner. The property is situated in a growing alternative office sub-market to the Luxembourg CBD and offers very stable cash flows to underpin long-term attractive investment returns. It also provides further geographical diversification to the fund’s portfolio in Luxembourg, as one of the more attractive office markets in Europe, following our previous investments under its mandate in Augsburg, Essen, Cologne, Barcelona and Brussels. The Fund has invested 160 million Euros since inception and is targeting the continuing enhancement of its real estate portfolio throughout Europe”.

Moving on to the significance of the location, the Leudelange business district is situated a few kilometres to the southwest of Luxembourg city and is one of the municipalities forming the first belt around the urban centre in an extension of the Howald and the Cloche d’Or areas. Over the last five years, the zone of Leudelange where the property is located has been expanding and now accommodates major insurers (Foyer, La Luxembourgeoise, DKV Luxembourg), banks (Raiffeisen), automotive activities (Car Avenue, Lease-plan, Mercedes dealership) and IT (SIX Payments, Lineheart, 3C payment). More recently, new occupiers that have arrived, or will come to the Leudelange district, include La Baloise, Northern Trust, Regus and BSP, demonstrating the growing occupier interest in the area due to its excellent accessibility, dynamic mix of companies and broad range of local amenities.

Catella was advised by Stibbe, Drees & Sommer and Deloitte in the due diligence process. Inowai acted as agent to the vendor.