Inovalis REIT, a Canada-based real estate investment trust, has entered the Spanish real estate market with the acquisition of two connected office buildings in Alcobendas, north of Madrid from Merlin Properties.
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.
The REIT said 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.
“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.”