Finland's Ilmarinen enters Germany with €100m-plus Berlin complex

Finnish pension provider and insurer Ilmarinen has bought its first real estate asset in Germany, as part of its strategy to boost its directly-held real estate outside of Finland.

The company bought an office and hotel property in Berlin in a 50:50 joint venture with a French institutional investor for a price of "more than €100m“.

Schroder Real Estate acted on behalf of Ilmarinen in buying the 26,000 Königstadt Carree property, close to Alexanderplatz in the city centre, and will handle asset management of the property, which consists of a 21-storey office tower and an 8-storey hotel building.

The Königstadt Carree is let to 12 tenants including Mercedes Benz Bank and an Ibis-branded hotel operated by Accor Hotels.

According to Ilmarinen's portfolio manager Mikko Antila, “Solvent tenants and long-term rental agreements make this a profitable and secure investment.”

“Berlin has established itself as the European hub for creative industries and the digital economy,” he said. "That makes the city very attractive to real estate investors, too. In addition, the vacancy rates of office premises in the city have decreased steadily, and rent levels have remained stable.”

Ilmarinen recently bought a 50% stake in a second Brussels office property from Munich-based Hannover Leasing, who will continue to manage the 72,000 sqm Covent Garden office scheme, near the Rogier metro station. The property is valued at more than €300m. Earlier in the year, in another deal with Schroder Real Estate, Ilmarinen bought into a company that owns the 100-metre Bastion Tower office complex in the centre of Brussels.

Ilmarinen is one of the largest institutional investors in the Finnish real estate market, but has begun diversifying its portfolio geographically through joint venture partnerships. It has about €35bn in assets and plans to boost its directly-held real estate qota from 8.8% to 15% by 2020. It has made a number of investments in Sweden, but says that Germany is "very strong on its radar", with a focus on office and retail properties in Germany's eight largest cities.