Transactions - JUNE 13, 2017

Tristan Capital acquires Madrid business park for €103m

by Jody Barhanovich

Tristan Capital Partners, a pan-European real estate manager, has acquired a business park in Madrid for €103 million ($115 million) from an affiliate of Lone Star Funds.

Tristan Capital acquired the business park through its recently launched Curzon Capital Partners 5 Long-Life fund. The business park comprises four buildings of grade-A office accommodation and 995 parking spaces.

CCP5 LL is a core-plus, long-life real estate fund that will invest in Western and Central European markets across the office, logistics, retail and multifamily sectors. The fund employs a value-added investment approach, providing enhanced duration and long-term exposure to the core-plus opportunity in Europe. The fund is the firm’s first long-life product and the latest in Tristan’s four-fund core-plus series.

“The first investment for the CCP 5 fund is a milestone for Tristan in Spain,” said Nikolay Velev, director of investments at Tristan Capital Partners. “It allows the core-plus fund to enter the dynamic office market of Madrid, which has a significant supply-demand imbalance following six years of record low completions.”

The Tristan fund is partnering with Zaphir Asset Management, a subsidiary of Aguirre Newman, which is co-investing in the transaction.

“We are already active in the market working to secure corporate occupiers for the vacancy in the park and are confident that the A-1 corridor offers a healthy rental growth opportunity as it’s one of the most consolidated non CBD office markets in Madrid,” said Fernando Ramirez de Haro, partner and managing director at Zaphir Asset Management.

Gross take-up of office space in Madrid has been strong, exceeding historical averages, according to Aguirre Newman. However, take-up has declined year-over-year. Rents have continued to rise and average rental prices have increased in all areas. In January 2017 Madrid’s office vacancy rate was at 10.4 percent, an increase from 6.2 percent in 2016, primarily as a result of the lack of new supply.

Investment in the office market in 2016 stood at a combined total of €5,000 million ($5,600 million) for Madrid and Barcelona. This makes 2016 the third best year in terms of investment volume since records began, just behind 2007 and 2015.


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