MAPFRE diversifies portfolio with London office building acquistion

Written by Adam Cadle

18/11/2020

MAPFRE has continued the diversification of its investment portfolio with the acquisition of an office building in the London neighborhood of Fitzrovia thorugh the SIEREF-GLL fund, which the insurer launches with its managing partner GLL Real Estate Partners (Macquarie Group).

The property in question is an office building comprising almost 2,700 square meters arranged over six floors, which was completely renovated in 2016. The building is home to the US technology startup Slack, entertainment law firm Russells Solicitors and international consultancy O&P Management, in addition to the Caravan restaurant on the ground floor. Yalding House, as the building is known, was the headquarters of BBC radio for more than 60 years.

This is the second transaction that has been closed via this vehicle in just two weeks, following on the back of the purchase of the Clifford Chance headquarters building in Luxembourg. “We are detecting attractive returns in offices in the prime areas of the main European cities, despite the COVID-19 crisis, which makes it easier for us to diversify our portfolio toward these alternative assets in a context of historically low interest rates,” José Luis Jiménez, MAPFRE’s group chief investment officer, said.

The fund, created in the first quarter of 2018, plans to invest up to €300m in prime properties in mainly European markets over a period of two to three years. In addition to London and Luxembourg, MAPFRE and GLL already own other real estate assets in Paris, Hamburg and Milan, with the fund already having committed close to €200m, two-thirds of the total envisaged. MAPFRE contributes 50% of the capital and the rest is distributed among a group of six institutional investors, mainly from the insurance and financial sectors and GLL itself.

Within real estate investment funds, MAPFRE also has a joint venture in place with Swiss Life Asset Managers France, with which it has already reached the committed volume of €375m with the purchase of a number of landmark buildings in Paris. Within the alternative investment segment, MAPFRE launched two funds of funds this year with the help of its partner Abante, the first targeting private equity, for which it signed an agreement with Altamar, and another for infrastructure, the underlying funds of which are managed by Macquarie.

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