Barings Real Estate Advisers, formerly Cornerstone Real Estate Advisers, has acquired the office and retail building "K25" in the Finnish capital Helsinki, acting on behalf of a German professional pension fund.
The property is in a prime location in the Helsinki CBD, Kasarmikatu 25, with a direct view over the "Esplanadi", Helsinki's famous shopping parade, lined with upmarket and luxury shops and with office occupiers mainly in the financial services and consultancy sector. It has a lettable area of around 4,800m², including ca. 3,600m² of offices, some 900m² of retail accommodation and around 300m² of conference and filing areas.
The vendor is an institutional investor, advised by the Finnish agency firm MREC Oy.
The property was previously occupied by ministries and public authorities but is currently completely vacant. Barings Real Estate Advisers will pursue a manage-to-core strategy for the building, which was constructed in neo-Renaissance style in 1890 and last modernised in 1998. It intends to gut and completely refit the property to a high-quality standard, in keeping with its location, and to re-let it to prestigious office occupiers and upmarket restaurants. The Barings Real Estate Advisers team in Helsinki will take over the asset management, letting and revitalisation of the property. Including the revitalisation and tenant fit-out budget, the investment is expected to total around €34m.
This acquisition is the first foreign investment by Barings Real Estate Advisers for a German institutional client. The acquisition of the property is also the pension fund's first investment in Finland.
The pension fund instructed Barings Real Estate Advisers to carry out the investment and portfolio management of European value-add investments in autumn 2015. It initially invested in Germany. The fund assets have been launched as a master fund by the portfolio management company Institutional Investment Partners.
"This transaction is a good example of how we can take advantage of the expertise and networking of our local team to successfully identify and acquire assets for our clients, even in investment markets with intensive competition. Our European-wide focus is broadly based, extending from offices to retail and through to logistics properties in the Core+ to Value Add classes of investment", comments Gunther Deutsch, Head of Investment Transactions - Europe at Barings Real Estate Advisers.
"The acquisition of 'K25' is a milestone - both for us and for our clients, for whom we facilitated entry to the Finnish market and even in the prime location in Helsinki's small CBD.Often, not more than one property a year changes hands there. Using our active asset management approach, we will take advantage of all the potential for increasing the value of the property and will create a prime asset, both for the tenants and for a subsequent purchaser", adds Matthias Gerloff, Director and Head of Institutional Investment Solutions at Barings Real Estate Advisers.
Currently, further European acquisitions are in preparation in the framework of this instruction.
