German fund Union Investment has purchased the Styria Center in the city of Graz, Austria for €40 mln, from a consortium of three private owners.
The building is a mixed-use property comprising residential, office and commercial units across a total of around 15,000 m2 of rental space.
The asset has been acquired for the investor's open-ended real estate fund immofonds 1, which is marketed solely in Austria. It also represents the second property acquired for the fund that is predominantly residential in nature, following the deal in May for a planned residential and commercial asset in Vienna comprising approximately 9,700 m2.
'With its mix of residential, office and retail use, the Styria Center is a highly attractive proposition in Graz city centre, offering strong potential for sustainable long-term rental income,' said Dr Kurt Rossmüller, member of the management board of Union Investment Real Estate Austria. 'The original building has been intelligently developed to create a modern, vibrant property that is an excellent fit with the immofonds 1 portfolio.'
The Styria Center comprises an existing structure, constructed in 1890 and refurbished in 2015, and a new building. Tenants include food retailer Spar, perfume shop BIPA and the Austrian Labour Market Service. In addition, 104 residential units ranging in size from 30 m2 to 100 m2 are being built and will be completed shortly.
Earlier in the year, immofonds 1 acquired the 6,200 m2 Max Tower office block at 1 Gürtelturmplatz in Graz, and holds another two properties in the city.
Following the acquisition of the Styria Center, the company’s real estate holdings in Graz are now worth a total of €110 mln.
The deal is expected to complete in autumn 2018.