M&G seals record Euro deal with €230m Stockholm office

The real estate arm of UK pension fund Prudential has snapped up a 340,000 square foot office building in the Swedish capital, the deal was made on behalf of the firm’s core, open-ended European real estate fund. 

M&G Real Estate, the real estate arm of UK pension fund Prudential, has purchased an office building in central Stockholm in a deal which has eclipsed the firm’s previous record for an asset in continental Europe.

The manager has acquired Blekholmen 1, located near Stockholm’s central station, for €280 million – the previous record stood at €208 million. The building is almost fully occupied, with more than 30 current tenants.

The transaction was capitalized with equity from the M&G European Property Fund, the firm’s open-ended, core vehicle, which it is investing in a diversified portfolio of commercial real estate across Europe.

The seller was Nordic real estate investment manager Niam.

Upon inking this latest transaction, M&G Real Estate’s current Swedish portfolio comprises 780,000 square feet of office, logistics and retail assets, which, when combined, are worth around €363 million.

Thorsten Slytå, director of the Nordic region at M&G Real Estate, was appointed to the role in August with a remit of expanding the firm’s presence in the region.

“Against the backdrop of Stockholm’s buoyant economy and office real estate market, demonstrated by the sector’s low vacancy rate of 3 percent, rental growth is being pushed upwards and investor appetite remains strong for core assets,” Slytå said. “Blekholmen 1 provided a unique investment opportunity for our investors seeking access to this well-established market,” Slytå added.

In September, M&G bought Italy’s largest retail park, the 570,000 square foot Market Central Da Vinci, for €208 million. At the time, the transaction was a record in continental Europe for M&G.

The retail park was also bought on behalf of the M&G European Property Fund, which has a portfolio of 43 assets with a total value of €1.5 billion, as at September 30, 2016.