Pictet completes first Spanish real estate investment

Pictet’s property fund, Elevation I, has completed its first acquisition in Spain: a mixed use building on nº 62 Paseo de la Castellana.

Last March, Pictet Group’s alternative investment arm expanded its offering with the launch of a direct European real estate investment strategy and appointed Zsolt Kohalmi to head the fund. In Spain, the Swiss bank has hired Pablo Granell Peris to lead the acquisitions reporting to Charlie Baigler who joined recently from CBRE Global Investors.

The fund invests in European real estate assets across sectors such as offices, residential assets, student and senior housing as well as light industrial assets. Its focus will be on the mid-sized segment of the real estate market, targeting investments in smart gateway cities in Western Europe.

According to Zsolt Kohalmi, Pictet’s global head of real estate and co-CEO of Pictet Alternative Advisors, Madrid is set to lead the European residential property sector’s returns.

Zsolt has stated that ‘Madrid is changing gears really fast. It is amazing to see how Madrid is becoming international. It was a very local market until now but suddenly all the Latin Americans are there, and other people are attracted by the fiscal regime’.

The property bought by the fund has a built area of 7,900m² and underwent a refurbishment which ended in 2012. It is set across nine floors and includes various terraces, a high street retail unit, an indoor garden and a façade overlooking the Paseo de la Castellana avenue. In addition, it has three basement floors dedicated to storage and parking with 110 spaces.

According to sources familiar with the asset, the vendor is a German high net worth individual who inherited the property.

Mr. Kohalmi has also declared that «Europe has stable cap rates due to continued low-interest rates, and is finally seeing rental growth come through, making it, in our view, currently the most attractive global market for real estate investment on a risk-adjusted basis.”

CBRE has acted as advisor in the deal and Paloma Relinque, national director of Capital Markets for the firm has described it as «historic» as «over the last ten years there have barely been a score of transactions on Madrid’s Paseo de la Castellana, which is characterized by a low rotation due to the long-term and institutional nature of its owners».

The office segment has also seen the week kick off with another transaction, that of Catalana Occidente‘s acquisition of an office building in the Méndez Álvaro neighbourhood from Kefren Capital Real Estate (KCRE).

The property is located on number 15 of Madrid’s Juan de Mariana street and has a built space of about 3,600m² above ground, distributed over five storeys, and just over 2,000m² below ground level, with 59 parking spaces.

KCRE, who purchased the property in 2017, has completed a full refuribishment of the property which is currently let to Talent Garden, an Italian ‘coworking’ operator.

For Elena Nabal, Deputy Head of Investments at Catalana Occidente, the acquisition «fits in the real estate investment strategy of the Catalana Occidente Group, which focuses on the acquisition of office buildings located in ‘prime’ areas of Madrid and Barcelona”.