AXA Real Estate strikes first Spanish investment since GFC

The real estate investment management business of French insurance giant AXA has won a competitive tender process to acquire 13 offices in Barcelona from and let to Catalan state authorities in a deal valued at €172 million.

AXA Real Estate Investment Managers, the real estate investment management business of French insurance giant AXA, has completed its first investment in Spain since the onset of global financial crisis in 2008.

The firm announced today it had acquired from Generalitat de Catalunya, the state body governing the Spanish region of Catalonia, a portfolio of 13 offices in a sale and leaseback deal valued at €172 million. The offices are all located in the city centre of Barcelona and combined comprise more than 1.13 million square feet.

The deal is highly significant as it demonstrates something of a thawing in institutional investor attitudes towards real estate in Spain, one of the worst hit economies in the European Union. According to European Commission statistics more than 25 percent of the population has been classified as unemployed as at the end of last month.

Even for assets with stable occupiers and income, many investors remain wary of investing in the country. However, at PERE’s European Summit earlier this month the country was mooted on stage as having an increasingly attractive market for buyers. Indeed, AXA Real Estate revealed it had won bidding for the portfolio via a “competitive public tender”. 

Pierre Vaquier, chief executive officer of AXA Real Estate, said in an announcement on the deal that AXA had been monitoring Spanish real estate acquisitions since the start of 2013 adding the firm had “felt the risk of a Eurozone break up had abated and that the economic prospects of the country had improved sufficiently.” 

AXA Real Estate has acquired the portfolio on behalf of AXA insurance companies. The transaction effectively is a sale and leaseback in which Generalitat will continue its occupation of the offices for another 20 years, paying €16.2 million a year, linked to CPI.

The acquisition brings AXA Real Estate’s Spanish property portfolio to €1.4 billion of assets under management of which €540 million is located in Barcelona. The firm manages more than €45 million of real estate assets overall.