Benelux-focused landlord Cofinimmo has sold a 99-year leasehold on the Egmont I and Egmont II office buildings in Brussels to a South Korean fund for an initial fee of €369.5 mln.
The purchaser is Egmont Luxemburg Sarl, an investment vehicle set up by a South Korean financial institution in Luxembourg.
The city centre properties, which represent a combined 53,000 m2 office area, are leased to the Belgian Government Buildings Agency.
The Egmont I and II buildings alone represented almost 3 % of Cofinimmo’s total portfolio surface
area, so the leasehold disposal helps Cofinimmo increase the granularity of its portfolio, according to the company.
The vehicle will pay an annual fee of €20,000 to Cofinimmo in addition to the first fee.
As the current rent stands at €16.7 mln, the initial fee represents a gross rental yield of 4.52%.
Cofinimmo said it realised a 10.4 % levered internal rate of return on the Egmont I and II buildings
throughout the period during which it held the assets. The unlevered internal rate of return stands at
Cofinimmo purchased Egmont I and built the Egmont II property in 2005-2006 for a total investment of €225.8 mln. It signed a lease with the Belgian Federal State for the letting of the entire office complex, maturing on 31 May 2031.
In 2009, Cofinimmo sold the future lease receivables for the properties to BNP Paribas Fortis for €199.6 mln.
In February of this year, Cofinimmo bought back the future rents from the lease that it had sold to BNP Paribas Fortis in 2009 for €232.4 mln.
The price paid for the leasehold is higher than the fair value of the assets on Cofinimmo's balance sheet as of 31 December 2017, plus the price paid to buy back the lease receivables, the Belgian firm said.
NautaDutilh, Liedekerke and CBRE acted as counsel for Cofinimmo in the transaction.