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Catella bets on the office sector in Luxembourg post Brexit

Catella Real Estate, the Munich-based investment manager, has acquired an office development in Luxembourg for the Sarasin Sustainable Properties – European Cities Fund (SSP) for around €52 million from Lafayette.

The 8,000 sq m building is located in the emerging Howald office district. On completion in Q1 2021 it will be occupied on a long-term lease by the Saint Pauls Luxembourg media group, now part of Mediahuis, owner of the Luxembourger Wort, Luxembourg Times and Radio Latina.

“This is a great addition to SSP’s Benelux portfolio at the heart of Europe, where the Luxembourg office market has become one of the top Brexit destinations as a number of UK and US financial institutions relocate there to maintain their presence within  the EU,” said Axel Bertram, co-portfolio manager of fund CREAG.

It is Catella’s second acquisition in Luxembourg in a year, showing the group’s commitment to the region, said Ralph Willems, senior acquisitions manager, Catella Investment Management Benelux. “We are ready to invest more in real estate in Luxembourg,” he said.

The property is on the outskirts of Luxembourg City in the Howald district, a former industrial and retail area which is fast evolving into a thriving office district, home to new schemes such as the Cubus buildings and the H2O estate, a 200,000 sq m mixed-use urban redevelopment area. The area has good transport links, with a new train station and plans in place to connect it to the city’s tram system next year.

The office development has a distinctive L-shape with a contemporary architectural design in keeping with the area and has six floors, including two of underground parking. It will be surrounded by green spaces.

It is being built to a high specifications with energy-efficient triple-glazed windows, LED lighting, integrated sun blinds, a rainwater harvesting system and ten charging stations for electric cars. Upon completion it will receive BREEAM Very Good sustainability certification.

“With its modern design, blue-chip tenant and green credentials, the building ticks all the boxes in terms of the fund’s acquisition criteria,” said Bertram.

SSP is a joint venture between CREAG and bank J Safra Sarasin, Switzerland’s leading sustainable private bank. The fund invests up to 25% of its capital in residential assets and the rest in commercial property.

Catella was advised by Stibbe, EY and Drees & Sommer. Inowai acted on behalf of vendor Lafayette.