Värde and NIPA close major office deals in Porto

US investor Värde Partners has completed the acquisition of the Torre Burgo office building in one of Porto’s largest office transactions this year.

The deal, which was financed by ING in the Dutch lender’s first operation in the city, involves one of the city’s most iconic buildings centrally located on Boavista Avenue. Representing an investment of €43 mln, the acquisition is the US group’s first in the Portuguese city.

Owned by local asset manager DosPuntos, the 18-storey tower was built in 2007 and encompasses a gross lettable area of 17,000 m2 and 260 parking spaces in the CBD. The asset boasts an occupancy rate of over 85%, with tenants including Western Insurance, Lufthansa, L'Oreal, KPMG, Iberdrola, Accenture, AON, Michael Page and Arrow Electronics.

'Due to its size and the fact that it marks the entry of one of the largest US private equity fund managers into this market, the sale of the Burgo complex is undoubtedly a historic operation for the city of Porto,’ commented Fernando Ferreira, head of Capital Markets at JLL which brokered the deal.

A secondary city in a tiny country like Portugal, Porto has recently emerged as a global investment destination. The city, which this year also made its debut at both Expo Real and Mipim, has seen the entrance of several new players including Värde Partners, M7 and Goldman Sachs which bought a big development site near the Porto stadium. ‘We believe that we are witnessing a turning point with regard to real estate investment in Porto, with the entry of major international players that until very recently had virtually no presence in this market,’ noted Ferreira of JLL.

NIPA Capital has also just made an acquisition in Porto - its second in the city. The Dutch investor has bought the D. Manuel II office building in the Portuguese city from local insurer Tranquilidade. The deal, a partial sale-and-leaseback, involves around 15,000 m2 of multi let space as well as 140 parking spaces. Although financial details were not disclosed, PropertyEU understands that the acquisition amounts to €19 mln.

‘A number of factors combined to put Porto on the map,’ added Luis Mesquita, head of CBRE’s Porto office which brokered the deal. ‘Macro-economic factors of course, but also the arrival of low cost flights which suddenly connected the city to 45 European destinations.’ He adds: ‘Tourists represented the first wave of investment and helped the city get known. Today, all kinds of international companies are opening offices here.’

This includes global conglomerates like the French banking giant Natixis, which has selected the city ahead of several other European hubs for its IT Center, or Sodexo which last year opened its Finance Services Center, serving all European countries. Similarly renewable energy group Vestas has picked Porto ahead of 90 other cities for its R&D facilities. Lender BNP Paribas also recently decided to expand its presence in the city. The French banking group has fully pre-let the 15,000 m2 Urbo Business Park which will be delivered this year by local builder DST. The landlord is believed to have received several offers for the scheme, which is expected to sell in the near future for some €40 mln.

‘During recent years, Porto has attracted the attention of several international companies and executives which are driving demand for office space in the city,’ comments Hugo Moreira, Värde Partners’ managing director responsible for real estate investments in Portugal.

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