Korea's Eugene enters Europe with Warsaw office buy

Korean securities firm Eugene Investment & Securities has emerged as the buyer of the Feniks office building in Warsaw in its first European investment foray.

Warburg-HIH Invest and JR AMC advised the Korean investor on the €43 mln acquisition from landlord, German group Patrizia.

The Feniks provides 10,000 m2 of space in the Wola district and is fully leased with anchor tenant being the BOS environmental bank (85% of space). Other occupiers include a supermarket, a drugstore and a coffee shop. The asset was built in 2012 by Europlan in a joint venture with Griffin Real Estate and acquired by IVG before Patrizia bought the building in 2017. It boasts a BREEAM Very Good certificate.

'Feniks is strategically located between the traditional CBD and the new financial and service district of Wola. This is precisely where the city is growing together,' said Matthias Brodesser, head of Transaction Management International at Warburg-HIH Invest. 'Warsaw is a vibrant market from many angles. This dynamism has a lot parallels that we have seen on evolving Berlin in the past. And this is exactly where we see the city in the next years ahead. We will continue to grow our portfolio here.'

'We see our investment in the Warsaw office market as a proxy for capturing growth in one of EU's fastest growing economies. MNCs should continue to expand office space in Warsaw benefiting from the breadth of skilled labor and lower costs. We are eager to see Wola district's continued expansion solidify its standing as the new CBD of Warsaw in the near future,' added HK Kim, managing director at Eugene Investment & Securities

'With yields in Western Europe breaking historic records, the CEE has become a very appealing substitute whereby high yields can still be achieved, simultaneously minimizing any trade-off in building quality or macro risk profile. We are convinced Poland, and especially its capital, Warsaw, is a perfect example of such a destination and moving further ahead, strongly growing to become serious competition to traditional Western European cities. We are happy Eugene share this vision and honored to manage their first real estate investment in Europe,' Hyon Suk Jang, managing director at JR AMC added.

The buyer was advised by Savills while the vendor was advised by CBRE.

Investment in Warsaw offices is on track to reach a record €2.7 bn in 2019 according to data from Real Capital Analytics. South Korean investors in particular have been particularly active in CEE so far this year and are on target to reach or exceed €1.2 bn in total investment  in the full-year 2019. This would make the South Koreans the single largest group of Asian investors in CEE over the 12-month period.

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