- Lease extensions signed on La Vaguada, a headquarters office building in Madrid and the Camarma de Esteruelas warehouse in the Henares Corridor, outside Madrid
- The two properties are part of European real estate funds: Encore+ and LEG II
LaSalle Investment Management (“LaSalle”), today announces that it has agreed two major lease extensions with hypermarket operator, Alcampo in Madrid, Spain. Acting on behalf of two of Continental European funds: Encore+ and LaSalle Euro Growth II (LEG II), LaSalle has successfully completed the lease extensions on La Vaguada, the tenant’s office headquarters in the centre of Madrid and the Camarma de Esteruelas warehouse in the Henares Corridor outside of Madrid.
A five year lease extension was added to the 10,300 square metre La Vaguada premises. The negotiations resulted in a significant valuation increase to the asset, which is held in the pan-European fund, Encore+, an open-ended property fund focused on continental Europe. The property is rented in line with external valuer’s rental value (ERV).
LaSalle has negotiated a circa five and a half years extension to the lease term at the Camarma de Esteruelas warehouse, which is located 33 kilometres northeast of Madrid. The 70,000 square metre property, which has excellent access to the A2 motorway and Barajas airport, is leased until early 2018. In addition to securing this excellent covenant, the deals have mitigated leasing risk in a tough occupier market. Both properties remain 100% leased.
Helen Garbutt, International Director at LaSalle Investment Management said: “Given the recent challenges in the Madrid real estate market, we are delighted to have confirmed these lease extensions. Both funds, Encore+ and LEG II, are focused on identifying long term growth in European real estate. Securing long term leases re-affirms our aim to invest in long term growth assets. We are continuing to source real estate in Europe that reflects this strategy.”
Launched in 2006, the Encore+ Fund which is jointly managed by Aviva Investors and LaSalle has a Gross Asset Value of circa €600 million. The Fund benefits from high occupancy resulting in solid income returns, with the potential for continued income and capital growth. The fund has ten assets and approximately two thirds of the portfolio are in France and Germany, with the remainder invested in Sweden, Italy, Spain and the Netherlands. The fund has negotiated the recent downturn in the European property markets well, and has begun a growth phase with returns ahead of forecasts. Returns over the last 12 months have been over 15% with an income yield of 5.9%. Encore+ is part of a global suite of long-term, open-ended property funds managed by LaSalle.
The LaSalle Euro Growth II (“LEG II”), launched in 2001, is a closed-end pan European real estate fund with an original investment capacity of €1 billion. The Fund targeted opportunities across all real estate types. Having divested significantly in the period early 2006 to early 2008, the fund currently holds assets in Sweden, France, Germany, Spain, and Italy. Investors include major pension funds, and institutional and high net worth investors from Europe and the Middle East.
