The Valesco Group, backed by Meritz Securities, has acquired the Finance Tower, a skyscraper located in Brussels’ CBD from Breevast and ZBG for c.€1.2bn. The purchase price represents an acquisition yield of 4.85%. The landmark purchase represents the largest single asset acquisition in mainland Europe in recent years, behind Paris’ Coeur Défense, and the second-largest single asset acquisition in mainland Europe ever. Valesco secured a consortium of top-tier lenders comprising Allianz, LGIM, SMBC and Bayern LB to provide a compelling c.€720m senior loan facility. Valesco has partnered with a number of the lenders on previous deals and so this transaction also represents a continuation of those relationships.
The 142-metre tall Finance Tower is an iconic freehold Grade A building and the largest commercial office premises in Belgium, providing 185,754m² of space over 36 floors. Delivering an annualised rent roll of €59m, the asset is let on a 15 year, indexed linked lease without breaks to the Régie des Bâtiments, a Belgian Government agency on behalf of the Ministries of Finance and Social Security. Circa 4,600 employees are based at the property, which also offers 712 parking spaces, an 850-seat restaurant and a 400-seat conference centre.
The asset enjoys a prime location in the heart of Brussels CBD, within close proximity to the Court of Justice, the Royal Palace and the Belgian Stock Exchange. Furthermore, the micro-location of the asset is expected to evolve over the coming years, following the approval of a masterplan which will see the delivery of circa 43,000m² of residential space, 19,000m² for mixed-use and 5,000m² of retail. The first phase is expected to be completed in 2021.
Shiraz Jiwa, Founder and CEO of The Valesco Group, commented: “Our forensic approach to real estate risk and our ability to unlock complex structures has enabled us to execute on this landmark and sought-after asset with the backing of a highly distinguished institutional investor in Meritz. This transaction continues our strong commitment to the European market in which we have invested €2bn in the last 20 months alone and see the substantial potential to further deploy capital to deliver value for our institutional and sovereign investors. Together with the c.€720m debt package, we will deliver investors highly attractive cash on cash returns. The exceptional quality of the tenant and asset coupled with the strategic and dynamic CBD micro-location, with the backdrop of strengthening Brussels real estate fundamentals, offers further asset management and value creation opportunities for capital appreciation.”
Henk Brouwer, CEO of Breevast and member of the Management Board of ZBG, added: “The sale of the Finance Tower is a significant achievement, representing a commitment by ZBG and Breevast of almost two decades to realising a high-quality asset in the heart of Brussels. This successful transaction reflects the growing international interest in large-scale urban revitalisation projects which we specialise in. We have a full pipeline of residential, commercial and office projects which aim to address the growing demand for high quality urban real estate.”