Inovalis Real Estate Investment Trust (TSX: INO.UN) ("Inovalis
REIT") today announced that it has entered the Spanish real estate
market with the purchase of two connected office buildings in
Alcobendas, north of Madrid. The high-quality, modern office
buildings, with approximately 118,400 SF of leasable space, are
fully let to two blue-chip tenants from the aeronautical
sector.
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The leases are in line with market standards, including an
annual indexation of rents to cover inflation and the full recovery
of operating expenses. Current rents are lower than market levels,
however the Inovalis S.A., the manager of the REIT, expects to
align the rents with other competing assets over time, by improving
the certifications and the cosmetic aspects of the asset at minor
cost, offering tenants more services and a better experience in the
building.
The property is part of the Arroyo de la Vega market, an
established office area strategically located a short distance from
downtown Madrid and the Madrid Barajas International Airport. It is
near the A-1 highway, a major roadway that connects many corporate
headquarters with Madrid. The building includes 250 parking spaces,
modern and flexible space with state-of-the art equipment and great
synergy for both tenants. It was built in 2001 and was recently
refurbished.
Inovalis S.A. has been actively pursuing assets in the Spanish
market since 2017 and now manages 10 assets in 5 cities, totalling
$205 million of assets under management.
“We are thrilled to have closed our first transaction in Spain
and our second acquisition of the year,” said Khalil Hankach, Chief
Investment Officer of Inovalis REIT. “It is a result of Inovalis
S.A.'s deep understanding and proven track record in asset
management in this important and competitive market, where we have
successfully negotiated leases, managed projects and executed a
range of value-enhancing measures. Our asset management team builds
long-term trusting relationships with tenants with a focus on
enhancing the quality of our buildings and optimising tenants’
office experience. The REIT will pursue its growth strategy in the
Spanish real estate market and portfolio enhancement through our
innovative and hands-on asset management.”
The Transaction
Inovalis acquired the property from MERLIN Properties. It led
the acquisition and sourced the financing conducted by
Targobank.
Inovalis S.A. is a French fund manager with 25 years’ experience
with all asset classes and with expertise in all principal fields
of real estate. Capitalizing on its experience, Inovalis S.A. has
the ambition to continue its expansion in the main real estate
markets of Spain and to continue to focus on improving its
properties to meet international environmental standards and
certifications and on the quality of its servicing to tenants.
Investing in Spain
Inovalis REIT’s decision to invest in Spain is driven by its
confidence in the strengths of the market, with a balanced
risk/reward ratio, a positive outlook and potential for growth. The
country’s economy is based on solid fundamentals, being central to
Europe and throughout the world (with strong cultural and economic
ties to South America). Under the EU’s long-term budget, coupled
with NextGenerationEU, Spain is expected to receive up to $192
billion to be invested until 2026.
The Spanish Real Estate Market
Spain’s real estate market is well-developed with significant
depth: office stock of more than 140 million SF for Madrid and
almost 75 million SF for Barcelona. International investors were
involved in approximately 80% of all real estate transactions in
the country in 2021, and the market is supported by national,
European and international financial institutions. Market liquidity
continues to grow as both Madrid and Barcelona are now in the top
10 of investment projections in Europe for 2022. Spain is also
attracting more businesses to its cities: Madrid has the fifth
highest start-up density across Europe and Barcelona is
well-regarded for its digital and innovative talent.
The Spanish market offers relatively high yields, low capital
values and rents compared to other markets in major European
cities. It also offers attractive opportunities in established and
mature locations difficult to source elsewhere in Europe when
assessing comparable risk and yields. In Inovalis’ experience,
short term value creation is also possible by converting properties
into prime assets within their micro locations and with a minimal
capital effort by improving the ESG compliance of the properties,
their visibility and identity.
All currency amounts have been converted to Canadian dollars ($)
using an exchange rate of $1.37 per Euro.
Forward-Looking Statements
Certain statements contained in this news release may constitute
“forward-looking information” within the meaning of applicable
securities laws that involve known and unknown risks, uncertainties
and other factors which may cause the actual results, performance
or achievements to be materially different from any future results,
performance or achievements expressed or implied by such
forward-looking information. The use of any of the words
“anticipate”, “continue”, “estimate”, “expect”, “intend”, “may”,
“will”, ”project”, “should”, “believe”, “confident”, “plan” and
“intends” and similar expressions are intended to identify
forward-looking information, although not all forward-looking
information contains these identifying words. Specifically,
forward-looking information in this news release includes, but is
not limited to, statements made in relation to: the acquisition of
a new asset in Madrid and the REIT’s corporate objectives. These
statements involve known and unknown risks, uncertainties and other
factors that may cause actual results or events, performance, or
achievements of the REIT to differ materially from those
anticipated or implied by such forward-looking information. The
REIT believes that the expectations reflected in the
forward-looking information included in this news release are
reasonable but no assurance can be given that these expectations
will prove to be correct. In particular there can be no assurance
that: the REIT will achieve any of its corporate objectives. Given
these uncertainties, readers are cautioned that forward-looking
information included in this news release are not guarantees of
future performance, and such forward-looking information should not
be unduly relied upon. More information about the risks and
uncertainties affecting the REIT’s business and the businesses of
its royalty partners can be found in the “Risk Factors” section of
its Annual Information Form and in its most recent Management’s
Discussion and Analysis, copies of each of which are available
under the REIT’s profile on SEDAR at www.sedar.com. All of the
forward-looking statements made in this news release are qualified
by these cautionary statements and other cautionary statements or
factors contained herein, and there can be no assurance that the
actual results or developments will be realized or, even if
substantially realized, that they will have the expected
consequences to, or effects on, the REIT. The forward-looking
information included in this news release is presented as of the
date of this news release and the REIT assumes no obligation to
publicly update or revise such information to reflect new events or
circumstances, except as may be required by applicable law.
About Inovalis REIT
Inovalis REIT is a real estate investment trust listed on the
Toronto Stock Exchange. It was founded in 2013 by Inovalis S.A. and
invests in office properties in primary markets of France, Germany
and Spain. It holds 14 assets representing $643 million of assets
under management. Inovalis REIT acquires real estate properties
indirectly via CanCorpEurope, an Alternative Investment Fund
authorized by the CSSF in Luxemburg, and managed by INOVALIS
S.A.
About Inovalis Group
Inovalis S.A. is a French Alternative Investment fund manager,
authorized by the French Securities and Markets Authority (AMF)
under AIFM laws. Inovalis S.A. and its subsidiaries (Advenis S.A.,
Advenis REIM) invest in and manage Real Estate Investment Trusts
such as Inovalis REIT, open ended funds (SCPI) with stable real
estate focus such as Eurovalys (for Germany) and Elialys (Southern
Europe), Private Thematic Funds raised with Inovalis partners to
invest in defined real estate strategies and direct Co-investments
on specific assets.
Inovalis Group (www.inovalis.com), founded in 1998 by Inovalis
SA, is an established pan European real estate investment player
with $10 billion of assets under management and with offices in all
the world's major financial and economic centers in Paris,
Luxembourg, Madrid, Frankfurt, Toronto and Dubai. The group is
comprised of 300 professionals, providing Advisory, Fund, Asset and
Property Management services in Real Estate as well as Wealth
Management services.
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version on businesswire.com: https://www.businesswire.com/news/home/20220411005902/en/
David Giraud, Chief Executive Officer Inovalis Real
Estate Investment Trust +33 1 5643 3323
david.giraud@inovalis.com
Khalil Hankach, Chief Financial Officer Inovalis Real
Estate Investment Trust +33 1 5643 3313
khalil.hankach@inovalis.com
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