At the end of last week, Commerz Grundbesitz Group (CGG) invested for the first time in Luxemburg by signing the deed for the President office building development in the City of Luxemburg. The transaction volume came to €230 million.
This new investment expands the Group´s activities in the European Markets. Meanwhile CGG manages more than 100 portfolio properties and projects in 11 European countries with a volume of about €11 million.
With a lettable area of about 32,600 m² and 260 parking spaces, the President is currently the largest office project development to be completed at the location in 2009. No other development project with the same year of completion in all probability - will offer new space exceeding 5,000 m².
Following its completion, the office building will be added to the fund portfolio of hausInvest europa, currently Europe's largest open-end property fund with fund assets of more than €8.5 billion.
The property was sold by Atenor Group, a Belgian project developer listed at Euronext in Brussels.
The President project development is located in Luxemburg's Kirchberg district in the north-eastern part of town. Next to the central business district in Luxemburg, Kirchberg is the city's most important location for office space. It is a site where numerous banks and corporations, as well as European institutions and authorities, have set up their offices. These include, for instance, the European Court of Justice, the European Court of Auditors, the European Investment Bank, EUROSTAT, and the headquarters of RTL Group.
Kirchberg benefits from optimal traffic connectivity. For instance, downtown Luxemburg is just minutes away, while 15 minutes by car will take you to the airport. What is more, the office complex is being built directly on Boulevard John F. Kennedy, the main artery of the Kirchberg location, which will make the building something of a landmark.
The total office space available in the City of Luxemburg is about 2.6 million m². Due to a very regressive zoning policy that the authorities adhere to in regard to new constructions, the real estate market has shown an above-average stability for years. As a result, the office sector has suffered from a considerable shortage in space in prime locations, both downtown and in the Kirchberg district. That is why the City of Luxemburg reports the lowest vacancy rates in all of Europe a mere 5.2% in 2006. In fact, at the location of Kirchberg, the current vacancy rate is down to just 1.5%.
"The value development potential of the President office project development is based primarily on the particular market situation at the Kirchberg location. The massive demand and the limited supply in office space ensures the property's long-term marketability and lettability," says Dr. Frank Pörschke, Chairman of the Board of Managing Directors of Commerz Grundbesitz.