Cavatina Holding has finalized the sale of 65 percent of shares in the flagship Chmielna 89 project in Warsaw. A fund managed by Madison International Realty will be the new shareholder in the building.
Cavatina Holding is successfully implementing multifunctional investments in the largest Polish cities, including the capital for over 5 years. The developer’s modern, technologically advanced buildings attract not only prestigious tenants but also investors. Efficient commercialization of facilities, highest quality of architecture & great location are just a few factors that encourage new owners to invest in Cavatina’s projects. The sale of shares in Chmielna 89 in Warsaw is another completed transaction made by the company this year.
The new 65 percent co-owner of the project is Madison International Realty, which was founded in 2002. The company is a world’s leader in providing capital in a variety of real estate transactions. Madison focuses on diversification of equity partners, capital monetization and recapitalization for Class A properties and investment portfolios located in the US, UK and Western Europe. Since its inception, Madison has raised $ 6.5 billion in capital commitments from over 150 institutional investors worldwide and has invested in over 185 million square feet of private commercial real estate with assets of $ 116.1 billion gross. The acquisition of shares in the Chmielna 89 building is the first joint venture transaction made by the companies.
The Seller was advised in the transaction by CBRE and Dentons law firm, whereas the Buyer’s advisors were Greenberg Traurig law firm, KPMG (tax and financial advisory) and BNP Paribas Real Estate (technical advisory).
“Through this transaction, we have secured a majority stake in a brand new landmark office in Warsaw CBD which is fully let on a long lease to Poland’s largest and best-known banks, PKO PB, at an attractive yield. We are strong believers in both the strength of the prime Warsaw office market and, more generally, the important role we believe the office will continue to play in the daily working lives of people post COVID. This acquisition further extends our Polish portfolio, following our purchases of a 66 percent stake in Capital Park last year and our investment into the ELI logistics platform. The transaction is typical of our investment approach whereby we find partners wishing to partially exit their investments in order to recycle capital to in other projects and we now look forward to working with the Cavatina team,” Matthias Cordier, Managing Director at Madison International Realty commented on the investment.
“The Chmielna 89 project in Warsaw is distinguished by unique architecture, attention to detail and an excellent location. We are convinced that this award-winning building will be a true pearl in Madison International Realty’s portfolio. We also have no doubts that its timeless, original shape, highest quality of workmanship and finishing will be popular among renowned tenants for many years,” summarizes Daniel Draga – Board Member, Cavatina Holding. “The sales contract for the Chmielna 89 building is our first joint transaction with Madison. We hope that this is just the beginning of fruitful cooperation between both companies.”
“The sale of a stake in Chmielna 89 confirms yet again that Cavatina Holding is currently one of the most significant developers in Poland, which perfectly prepares assets for the needs of demanding institutional investors in terms of the length and quality of lease agreements as well as the quality of delivered buildings. We are very happy that CBRE had an opportunity to advise on the sale transaction, items related to a joint venture agreement and that we were involved in the project’s financing aspects,” adds Przemysław Łachmaniuk, Director – Investment Properties, CBRE.
The Cavatina Group commenced operations in 2015 in Krakow and currently has an investment portfolio of 0.5 million sqm. in implementation until 2022. Further commercial and residential projects are in the project phase, which means that by 2025 the Group’s assets will reach 1 million sqm. Cavatina has its own architectural studio and a general contractor in the full scope of investment implementation and fit-out.
The 14-storey Chmielna 89 office building is located in the business centre of Warsaw, between Chmielna Street and the main communication artery of the city, Aleje Jerozolimskie. The characteristic shape of the building, resembling a crystal, makes the newly built office building a recognizable point on the Warsaws skyline.
The office building provides over 25,000 sqm of A-class office space. The office function will be complemented by service premises on the ground floor of the building, including a canteen, a shop and a cafe. A distinctive feature of the project is green terraces that gently “descend” towards ul. Chmielna with a total area of 370 sqm.
In June, the building obtained an occupancy permit and gets a BREEAM certificate at the Excellent level. Soon it will become the seat of one of the largest financial institutions in Poland, i.e. the bank PKO BP. The new tenant will move to the building at the turn of the third and fourth quarter of this year and will occupy all office floors.
The original appearance of the building as well as energy-saving technological solutions were appreciated at the International Property Awards 2018-2019 competition in London. Chmielna 89 received the “Best Office Development in Poland”, “Best Office Development In Europe” and “Best International Office Development” awards. In 2020, the building was awarded in the Property Design Awards competition in the category: office building.
