Irish Life buys Rue de Genève 4 from Herpain-Urbis
Herpain Urbis S.A. has acquired the Genève 4 building, a co-ownership of which the majority belongs to Securex, and already sold the future office development to Irish Life Assurance plc. CBRE advised the investor in this transaction.
Rue de Genève 4 has been the subject of a double-transaction, where the building was sold to a developer and subsequently sold to the end-investor on virtually the same date. According to Maxime Xantippe, Managing Partner at CB Richard Ellis: “Both developer and end-investor agreed terms on the sale in the months proceeding the transaction before either party actually owned the building. The Genève 4 transaction is therefore the first investment deal where the building is acquired at such an early stage of the development.
The Genève 4 building totals 19.075m² of office space, 2.176 m² of archives, 241of interior parking units. The office building, located in the North-East of Brussels, will be completely refurbished with energy-efficiency as one of the top priorities. The start of the actual redevelopment works will largely depend on the current occupants, who have requested the possibility to remain in the building for a non-disclosed period of time.
Hilary Fitzgibbon, Head of Syndicated Property, at Irish Life, expressed to be “delighted to be involved in a transaction with Herpain Urbis who have an excellent reputation especially for environmentally friendly buildings. We have worked hand in hand with the developer to achieve our mutual objectives. We are still very much looking at Brussels, among others because of its stability. In a European perspective, Brussels appears to be less affected by the recent challenges in the financial markets.”
The current structure allows the developers to cover part of the development and commercial risk, while the end investor is able to buy the product at reasonable conditions. Additionally a framework was created, where both parties can benefit considerably if one is able achieve long term lease contracts with prime covenants after renovation.
The most appealing characteristic of the Genève 4 building is in fact that it is located in a micromarket, that was previously chosen as one of the Decentralised office clusters of the European Commission. This location will become even more interesting for the European Commission once a new train tunnel under the Rue de Cortenbergh will connect the Schuman roundabout (headquarters of the European Commission) with the Gare du Josaphat (train station), and subsequently the National Airport in Zaventem. The Gare du Josaphat is located at less than 500m from the subject property.
"This is not a simple forward commitment. CBRE has put in place an innovative structure in which the end investors is front in line since the start but without any of the development risk" according to Maxime Xantippe. The Geneve 4 sale reflects our capacity to successfully close transactions in a more challenging financial market. Despite the tougher financing conditions, the deal also indicates that the market is still in favour of forward commitment transactions as long as the buyer is being offered a creative opportunity."
Belgium