City Station is a landmark building located at Avenue de la Gare 8-10 and developed in 2013-2014 by Pylos. This mixed use building offers office space of 2,550 m² and a retail area of 810 m². The tenants are Centralis Group, Russian Commercial Bank and Alpha Private Equity Fund 6 Management for the offices. The ground floor is let to well-known ready to wear retailer New Yorker. The investment volume is in the region of € 31 mln.
Cushman & Wakefield acted as advisor to the seller, Pylos, a real estate developer which concentrates on retail real estate. The buyer is a client of DTZ Investors.
This transaction contributes to the current vitality of the Luxembourg commercial real estate investment market, which had already amounted to €607 mln by the end of Q3, of which 81% has been invested in office space. In view of transactions currently being negotiated or in the process of being terminated, the threshold of €900 mln - €1 bln is in prospect, which would be a record since 2007. Due to higher prime rents in the central districts (€ 45/m²/month in the CBD) and to the compressed nature of prime yields (5.20% in the CBD), the cost per square metre of prime space is reaching new highs. However, this does not seem to be putting investors off, whether institutional or other, as they are showing a great appetite for this type of quality real estate product in a stable economic environment.
Michael Despiegelaere, Associate: ‘City Station is one of those rare assets which brings together all of the qualities investors are looking for, namely: an ideal location right in the heart of the station district, a modern building and a letting situation with a diverse risk profile. Through this transaction, we have proved that Cushman & Wakefield is a substantial player in Luxembourg. It should not be forgotten that we have concluded some exceptional transactions over the past two years in the country: Zara (Grand Rue), Sternberg House, Strassen retail park – and we still have some excellent transactions in the course of being terminated. We have considerably developed our investment activities in Luxembourg to respond to market growth and to increased demand for real estate products in the country over recent years. Following a period of uncertainty after the financial crisis, I have seen that Luxembourg has not only regained its attraction for existing investors looking to enlarge their portfolios, but also for a certain number of new players who are looking to take positions using our services” concludes Michael Despiegelaere.
Source: Cushman & Wakefield