Signa RECAP JV completes €212m Vienna tower deal

The Austrian private equity real estate fund manager has acquired the IZD Tower in Vienna, Austria for €212m in a joint venture with an unidentified German insurance group.

Signa Real Estate Capital Partners, the Austria-based private equity real estate firm, has completed the €212 million purchase of a large office tower in Vienna in one of the largest single asset transactions in Europe for 18 months.

The IZD Tower, located in the Donaustadt region of the city near the United Nations building, was purchased via a joint venture with an unnamed German insurance firm. It spans 70,000 square meters and is let to tenants including Ernst & Young.

Stephen Miles, Director of EMEA capital markets at property services firm Jones Lang LaSalle, which brokered the deal, said: “This represents one of the largest single asset office transactions in Europe in the last 18 months and demonstrates that there is investor strength and depth for good quality assets, despite macroeconomic conditions that remain challenging across many markets.”

Sebastian Greinacher, chief executive officer of Signa RECAP, said in a statement: “On the basis of detailed knowledge about the object and the high complexity of the transaction on the one hand and the great financial pressure on the seller on the other hand, we were able to purchase the IZD Tower under the replacement costs.”

Seller Matrix European Real Estate Investment Trust said the sale would enable it to “de-gear and stabilise” its portfolio. The deal would also enable the trust to meet debt obligations with its lender Lloyds Banking Group.

Signa RECAP completed the investment on behalf of its Signa Real Estate Capital Partners Development I Fund, one of three opportunity funds managed by the firm.

Last month, the fund closed on €200 million in equity from investors including German and Austrian insurance companies, pension funds and trusts. In addition, the firm, which is based in Vienna and Innsbruck, committed 10 percent of its capital. The target return of the vehicle after costs is more than 18 percent IRR.

Other purchases by the fund include the former headquarters of Bank fur Arbeit und Wirtschaft which it plans to convert its use to a mixed retail and office complex.