Union Investment has acquired a company, holding as main asset the 'K Point' property located Rue Edward Steichen on the Kirchberg plateau in Luxembourg. The vendor was AXA Real Estate, on behalf of one of its clients. Union Investment will add the property company to its open-ended UniInstitutional European Real Estate fund.
The purchase price was not disclosed.
K-Point is a core H-shaped building developed in 2008 by the Belgian developer Allfin and consists of 8,169 m² of office space, 1,041 m² of retail space, 655 m² of archive space and 87 parking units. It is built on 5 upper floors and two basement levels.
The building is fully let, the office area being occupied by the law firm Loyens & Loeff while the 4 retail areas are let to different retailers (International insurance group, ING, a hairdresser and a fitness club).
K-Point is located on the Kirchberg Plateau - one of the three core office markets in Luxembourg - which has become increasingly attractive to international investors over recent years.
Since the end of 2011, the strong fundamentals of the Luxembourg real estate market (low vacancy rate, sustained take-up, no speculative development) have increasingly attracted cross-border real estate capital.
The economic performance of Luxembourg itself has further increased the attractiveness of the country as a target, in particular for institutional real estate funds and asset managers seeking core sector acquisitions. High grade offerings with medium to long term secured cash flow are rare however and limit overall investment activity in the country, resulting in strong competition for this category of assets.
Volker Noack, Member of the Management Board of Union Investment Real Estate GmbH, Hamburg: "We have secured an excellent quality office building for our institutional fund given the current attractiveness of Luxembourg and the quality of the asset."
The vendor, AXA Real Estate was advised by JLL. Union Investment was advised in the acquisition by CBRE.