Union Investment has acquired an office property in central Helsinki comprising around 5,700 sq m of rental space. The property at Eteläesplanadi 12 facing the well-known Esplanadi park was constructed in 1899 and most recently upgraded in 2012. At the time of acquisition, the occupancy rate is around 80 per cent. The vendor is OP Life Assurance Company. Union Investment had legal advise from Merilampi Attorneys Ltd. The vendor was advised by Catella Finland.
The purchase price is in the region of EUR 50 million and the acquisition will be added to the holdings of the institutional open-ended real estate fund UniInstitutional European Real Estate as part of its ongoing core strategy for the Nordic markets. In early July, the fund announced the acquisition of an 11,500 sq m office property in central Stockholm. At the end of 2018, it had sold three office buildings and a logistics property in Greater Helsinki which no longer fitted the fund’s strategy.
“This office property facing Esplanadi park represents a rare opportunity to invest in the heart of Helsinki’s central business district. We believe that the multi-tenant situation of the property and the ongoing dynamic rental growth in the city’s core locations will make it possible to steadily increase the building’s earning power through active asset management. At the same time we will continue to monitor the Nordic markets closely for further acquisitions,” said Martin Schellein, Head of Investment Management Europe at Union Investment Real Estate GmbH.
The five-storey building offers approximately 3,900 sq m of office space and around 900 sq m dedicated to retail use and storage. The three major tenants, who together occupy some 60 per cent of the rental space, are a law firm, the Finnish Ministry of Justice and software company Vainu. Helsinki’s main railway station is approximately 700 metres from the building and the city’s main pedestrian zone is within walking distance.
Following the acquisition of this office property near Esplanadi park, Union Investment now holds five office properties and one development project in Helsinki worth around EUR 500 million. The Hamburg-based real estate investment manager recently acquired Urban Environment House at the development stage for the UniImmo: Europa fund. Completion of the approximately 27,500 sq m office property, which is fully pre-let to the City of Helsinki, is scheduled for summer 2020.