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CA Immo acquires Class A office building in Warsaw

  • CA Immo acquires the 34,500 sqm Class A office building Postepu 14 in Warsaw for around € 87 m
  • The headline price reflects a gross initial yield of 7.5% and capital value of € 2,500 psqm
  • High occupancy rate of 95% with major leases to investment grade tenants including AstraZeneca and Samsung Electronics
  • Annual gross rental income of around € 6.5 m strengthens CA Immo's recurring earnings

 

CA Immo signed and closed the acquisition of Postepu 14, a landmark Class A office building located in the Mokotow district of Warsaw. The property totals around 34,500 sqm GLA and is nearly fully let to investment grade credit tenants such as AstraZeneca and Samsung Electronics. The purchase price is approximately € 87 m, with annual gross rental income of around € 6.5 m, reflecting a 7.5% gross initial yield. Following the sale of Zagrebtower in October 2020 for a 5% premium to book value, with this transaction, CA Immo takes another step in its core market expansion strategy and capital rotation program, setting the path for continued growth of recurring earnings while improving the underlying quality of the portfolio. As planned, the acquisition will contribute to CA Immo's recurring earnings (FFO) in the fourth quarter of 2020.

Keegan Viscius, Chief Investment Officer (CIO) of CA Immo: “With the Postepu 14 office building we are buying one of the best assets in terms of quality, tenant covenant and location in one of the most important office submarkets in Warsaw. With a day one gross rental income yield of 7.5%, this investment will provide immediate rental income secured by investment grade tenant covenants and a basis that reflects a discount to replacement cost and under rented in place rent. It´s located in a submarket with resilient tenant demand and zero new construction pipeline.”

Hedwig Höfler, Head of Investment Management AT and CEE, adds: “Acquiring one of the most state-of-the-art office buildings in the district of Mokotów is a perfect exposure for us in this strong submarket. Offering green solutions like clean energy from wind turbines as well as the use of rainwater to cool the AC systems, Postepu 14 meets highest sustainability standards and supports our transition to low-carbon, sustainable business operations.”

Postepu 14 – Investment Highlights

Postepu 14 occupies a prime position in the core Mokotow submarket, one of the most important Warsaw office submarkets that has seen resilient and consistent office take up of around 200,000 sqm per annum, and accounts for around 25% of total Warsaw office stock. With significant investment in submarket infrastructure, and recent development of high quality residential, the submarket has evolved into a dynamic environment for work, leisure, and living.

Postepu 14 is one of the most state-of-the-art office buildings in the district of Mokotów, offering 34,500 sqm of leasable space. The structure stands out for its green solutions, including clean energy from wind turbines, cycling infrastructure, an electric vehicle charging station, energy-saving lifts and lighting as well as the use of rainwater to water plants and cool the AC systems. Developed to a high international standard and completed in 2015, the property has a BREEAM Excellent sustainability certificate. The property consists of two sections with seven and ten floors, connected by a four-story central section, creating an efficient and flexible "H" shape floor plan.

Anchored by AstraZeneca, who have been a tenant of the submarket for over 15 years, the high quality investment grade rent roll reflects a low average in place rent, allowing for a compelling value proposition given the high quality, modern, green, efficient space of the property.

Advisors to CA Immo were Greenberg Traurig (legal), KPMG (tax), Gleeds (technical) and Cushman & Wakefield (commercial).

 

CA Immo in Warsaw*

The Polish asset portfolio, which accounts for approximately 10% of the total portfolio of CA Immo, consists of eight office buildings in Warsaw. The book value of the portfolio comprising around 137,200 sqm is approximately € 510 m, the occupancy rate stands at 97%.

*as at 30 June 2020; excl. Postepu 14 office building