Catella Real Estate AG (CREAG) has sold the Lonnrotinkatu 20 office property in Helsinki, Finland, which was acquired in 2011 for the special AIF Catella Scandia Chances, in Helsinki, Finland, as a project development to the Slatto Value Add II fund of the company Slatto Forvaltning, now due to the need for renovation, after a successful letting phase sold in the form of a share deal. Due to changing challenges in the office rental market, the property is now being sold as a development project to be converted into a hotel property. The excellent location for hotel use made the transaction possible despite the challenging environment for project developments.
Lönnrotinkatu 20 is a commercial building in Helsinki, Finland, with almost 5,800m2 of rentable space. The property, built in 1972, was acquired by Catella in 2011. The ground floor is fully rented to Lidl, while the four upper floors are vacant. The property's excellent location makes it suitable for conversion into residential accommodation, and it has been granted a building permit. The purchase contract closed on November 3, 2023.
In the future, the property will be operated as a hotel by BobW, a leading company in the hospitality industry.
Portfolio manager Axel Bertram commented: “The sale of the property as a project development took place in a difficult market environment, including in Finland. In conjunction with the ongoing rental income during the operating phase, the sales profit results in a very good return on investment. The fund’s liquidity situation is strengthened and enables the portfolio to be optimized.”
Catella Real Estate AG was supported in the transaction by Catella Asset Management Oy and provided legal advice by Castren & Snellman Attorneys Ltd and tax advice by PWC.
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