Colonial overcomes a pending subject and enters the Berlin market

BarcelonaColonial SFL, until now focused on the office markets of Barcelona, Madrid, and Paris, has overcome one of its pending tasks: setting foot in Berlin. For some time now, the top executives of the Catalan real estate company, Juan José Brugera (president) and Pere Viñolas (CEO) had expressed interest to bring its business model to the German capital.

To do this, Colonial and Generali Real Estate – the real estate subsidiary of the Italian insurance group Generali – announced this Friday the creation of a joint venture in which the Catalan-based socimi will hold 51% of the company, owner of a portfolio of two buildings superprime in Berlin's central business district valued at approximately 300 million euros. As the two companies reported in a joint statement, the assets are LindenCorso, on Unter den Linden street, and Atrium, on Friedrichstrasse, which previously formed part of a Generali fund participated in by local companies and investors. As part of this strategic partnership, with which Colonial enters the German market, Generali will maintain a 49% stake in the joint venture and will continue to be a long-term operational partner in Germany for this portfolio.

For Colonial, its investment of around 150 million euros is aligned with its strategy of selective expansion in major European cities, focusing on assets "of high quality, in central locations, solid fundamentals, high income visibility and growth potential," the company has underlined. At the same time, the SOCIMI led by Viñolas has highlighted that this operation reinforces its pan-European platform, expands the geographical diversification of the portfolio prime from the group and provides "immediate" income along with medium-term growth.

Colonial has also highlighted that this operation also represents a further step in its capital recycling strategy, as it redistributes capital into opportunities "that offer superior growth prospects and attractive risk-adjusted returns". For its part, for Generali Real Estate, this transaction reflects "a continued focus on active portfolio management, aimed at optimizing returns and mitigating concentration risks, while maintaining exposure to prime assets in strategically relevant markets".

Iconic areas

The two assets that will be managed by the joint venture between the two companies, LindenCorso and Atrium, are located in emblematic areas of the center of Berlin. All in all, the assets represent 42,000 square meters of gross area and have a diversified mixed-use profile combining offices, commercial spaces and first-class housing.

The two properties have ample floors, a diversified base of "high-quality" tenants, and an occupancy rate of over 90%, providing stable income to the company. Both companies have indicated that the transaction is subject to the relevant administrative authorizations.