Valesco and Korea's Meritz swoop on €1.2b Brussels tower

London-headquartered Valesco Group, backed by South Korean investor Meritz Securities, has acquired the Finance Tower in Brussels for €1.2 bn from Breevast and ZBG.

The off-market transaction represents the second largest-ever single asset acquisition deal in mainland Europe, according to Valesco, behind Paris’ Coeur Défense. The purchase price represents an acquisition yield of 4.85%.

The 36 storey, 185,754 m2 office tower is 100% let to the Belgian government, and is the largest commercial office premises in Belgium. Standing 142-metres high, the property delivers an annualised rent roll of €59 mln, through a 15 year, indexed-linked lease without breaks.

The tenant is the Régie des Bâtiments, a Belgian Government agency on behalf of the Ministries of Finance and Social Security. Some 4,600 employees are based at the property, which also includes 712 parking spaces, an 850-seat restaurant and a 400-seat conference centre.

Shiraz Jiwa, Founder and CEO of The Valesco Group, commented: 'Our forensic approach to real estate risk and our ability to unlock complex structures has enabled us to execute on this landmark and sought-after asset with the backing of a highly distinguished institutional investor in Meritz.

'This transaction continues our strong commitment to the European market in which we have invested €2 billion in the last 20 months alone and see substantial potential to further deploy capital to deliver value for our institutional and sovereign investors.'

Valesco secured a consortium of lenders comprising Allianz, LGIM, SMBC and Bayern LB to provide a €720 mln senior loan facility for the purchase. The firm said it had partnered with a number of the lenders on previous deals.

'Together with the c.€720 mln debt package we will deliver investors highly attractive cash on cash returns,' Jiwa added. 'The exceptional quality of the tenant and asset coupled with the strategic and dynamic CBD micro-location, with the backdrop of strengthening Brussels real estate fundamentals, offers further asset management and value creation opportunities for capital appreciation.'

Henk Brouwer, CEO of Breevast and member of the management board of ZBG, added: 'The sale of the Finance Tower is a significant achievement, representing a commitment by ZBG and Breevast of almost two decades to realising a high quality asset in the heart of Brussels.

'This successful transaction reflects the growing international interest in large-scale urban revitalisation projects which we specialise in. We have a full pipeline of residential, commercial and office projects which aim to address the growing demand for high quality urban real estate.'

The transaction marks the third time Valesco has been backed by Meritz Securities in the last 18 months. JR AMC and AIP Asset Management are the registered South Korean domestic asset management companies supporting the deal.

Cushman & Wakefield, Ashurst, PwC and Arcadis advised the buy-side and CBRE, Loyens Loeff, Stibbe and PwC legal advised the sell-side.


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