Aviva Investors has acquired an education centre in Kristiansand, southern Norway on behalf of its Continental European Long Lease Strategy Fund (CELLS).
The investment volume was NOK 415 mln (€43 mln), according to the vendor, Swedish property company SBB.
The asset has a total rentable area of 15,800 m2 and is fully rented to the Kristiansand municipality with a remaining rental period of 20 years. The rental income amounts to over NOK 19 mln per year. The transaction will close on 30 April 2018.
This is the second investment by CELLS, which launched in Q2 2017. The fund aims to deliver secure, predictable cash flow from predominately index-linked leases in a portfolio of continental European properties with an initial focus on office, retail, logistic and alternative sectors such as social infrastructure in Germany, Austria, Benelux and Scandinavia.
Matthias Hübner, fund manager Long Income Europe at Aviva Investors, commented: 'This transaction represents an attractive opportunity to invest in a very stable asset in the educational sector on a 20 year inflation-protected lease with a key Norwegian municipality. The Kristiansand asset represents a defensive investment with a long-term secured cash-flow, which fits perfectly into the investment profile for CELLS.'
'We have now invested nearly 50% of the fund’s commitments, which demonstrates our ability to deliver on our European long-lease strategy. We remain in continuous communication with a wide range of institutional investors, who have expressed an interest in our CELLS fund.'
Daniel Lienhard, head of transactions for Aviva Investors Real Estate Germany, added: 'We are convinced of investing regionally in social infrastructure, if the asset makes sense in its urban and social context. To that end, we are very pleased to be able to demonstrate our ability to source and execute off-market transactions through our local network in the Nordic region with this acquisition. The Nordics are a target market for the fund as a source of secure long-income assets. We have a strong pipeline of selective long-income European real estate assets and are confident we will invest the remaining equity commitment over the course of 2018.'
SBB will continue to carry out the property management for Aviva Investors. Arctic Securities acted as the financial adviser to the fund for this off-market transaction and Schjødt acted as legal advisor.