IREIT Global to acquire Barcelona office building for around 27M euro

In September 2021, IREIT Global entered a deal to acquire the Parc Cugat office building in Barcelona, Spain. Credit: IREIT GlobalIn September 2021, IREIT Global entered a deal to acquire the Parc Cugat office building in Barcelona, Spain. Credit: IREIT Global

IREIT Global has entered a deal to acquire the Parc Cugat office building in Barcelona, Spain, from Madrid-listed Inmobiliaria Colonial, SOCIMI, S.A. for 27.2 million euro, or around S$43.1 million, the REIT said in a filing to SGX Friday.

The purchase price is a discount of around 4.5 percent to the property’s independent valuation with rental guarantee, the REIT said.

“We are pleased to be able to secure this property at an attractive purchase price,” Louis d’Estienne d’Orves, CEO of the REIT’s manager, said in the statement.

“This enables us to offer modern Grade A space at competitive rents to any occupiers. Its quality asset features and long leases with blue-chip tenants will complement well with IREIT’s portfolio, as we continue to execute our strategy to grow and diversify IREIT’s tenant and geographical exposure,” he added.

He estimated the deal will lead to a distribution per unit (DPU) accretion of 3.4 percent on a pro forma basis.

The REIT said the deal will be financed with external bank borrowings and internal cash resources, including S$12.6 million from the net proceeds of its September 2020 rights issue and S$11.9 million from the June 2021 rights issue.

Parc Cugat, with a gross lettable area of round 15,510 square meters, is located in a business park in Sant Cugat del Vallès, around 20 minutes from Barcelona’s financial district, the filing said. The building is currently leased to five blue-chip companies — Kyndryl (a spin-off from IBM), KLB Group and Grupo Escada — and has a committed occupancy rate of 64 percent, the filing said.

Under the deal, the seller will provide a rental guarantee for the vacant space on the ground floor for around 15 months, IREIT Global said, noting the ground floor became vacant in May 2020.

The REIT currently owns four freehold office properties in Spain, with two in Barcelona and two in Madrid.

“Despite the Covid-19 pandemic, these quality properties have continued to remain resilient, with 100 percent of IREIT’s contractual rents collected in the first half year ended 30 June 2021 and over 99 percent collected in FY2020. The acquisition will add another quality asset to IREIT’s portfolio and enhance its footprint in Spain,” IREIT Global said.

In addition, IREIT Global holds five office properties in Germany and 27 retail properties in France, with a portfolio valuation of 889.7 million euros, or around S$1.41 billion, the filing said.