ILMARINEN INVESTS IN BERLIN OFFICE PROPERTY
Ilmarinen is continuing its venture into German real estate by making an investment in an office property in Berlin. The investment will be carried out jointly with Immobilien Europa Direkt, an open-end real estate fund managed by Schroders and backed by Swiss institutions. Ilmarinen has roughly a 50 per cent stake in the property.
The Victoriastadt Lofts office property is located in the popular, still-developing Friedrichshain area in Berlin. Located in the immediate vicinity of Ostkreuz station, one of Berlin’s busiest rail hubs, the property offers excellent connectivity to public transport.
The red-brick building complex comprises a whole block. Completed in 1927, it was in industrial use until the 1990s when it was converted into office space. The building complex underwent an extensive renovation in 2014.
The property is almost fully let on long-term leases. The most significant tenants are Deutsche Rentenversicherung (German statutory pension insurance scheme) and Deutsche Post, which together occupy close to 65 percent of the premises. A group of young, innovative businesses, such as Rocket Internet, a company investing in online growth companies, have recently moved into the building.
“The property has well-known anchor tenants with sound credit quality. In addition, its future development opportunities provide for increased long-term security for the investment,” says Portfolio Manager Mikko Antila.
The office building comprises six above-ground floors and an underground floor. The lettable area totals approximately 68,000 square metres.
Ilmarinen diversifies its real estate portfolio
The office property Victoriastadt Lofts is Ilmarinen’s third real estate investment in Germany. In late 2015, Ilmarinen invested in the office and hotel property Königstadt Carree in Berlin and in February in the Theodor Heuss Allee 50 office property in Frankfurt.
Ilmarinen’s strategy is to diversify its real estate portfolio beyond Finland’s borders. According to Mikko Antila, Berlin currently has one of the most attractive real estate markets in Europe.
“Berlin has further strengthened its position as one of Europe’s strongest real estate markets. In addition to high investor interest, this is also reflected in growing rental demand for office space: vacancy rates for office premises have declined to a record-low level, which has clearly started to put upward pressure on rents," says Antila.
"All in all, Berlin is currently an attractive investment location for Ilmarinen, which seeks long-term return and security for its investments. We do not exclude the possibility of making further real estate investments in Berlin in the foreseeable future,” Antila says.
Ilmarinen’s advisor in the company’s investments in Berlin, Schroder Real Estate, will also handle the asset management of the property.
Mikko Antila, Portfolio Manager, tel. +358 50 5779066