Echo Investment has signed preliminary agreement with Invesco Real Estate European Fund (IREEF) to sell its flagship project, the Q22 office building in Warsaw.
The value of the transaction will be established in the final agreement and it will be calculated on the basis of a formula which takes into account the actual sales date, a commercialization level and a cap rate of 5.35 percent. Q22 construction was completed in July 2016. The list of its tenants includes such names as Deloitte, Allegro, Linklaters, William Demant, Vestor DM, Citi Handlowy, Savills and White and Case, as well as Griffin Real Estate, Echo Polska Properties and Echo Investment itself. At the moment, Q22 space has been leased in more than 80 percent, and by the end of the year will reach 90 percent.
“Q22 is our highest, the most innovative and the most prestigious project, so we are happy it goes into good hands. The deal with Invesco Real Estate stands in line with our new strategy of profitable growth, based on being a pure developer delivering high quality developments and selling them when they are completed and leased up,” said Nicklas Lindberg, Echo Investment CEO.
“We are delighted to increase our Central European platform with such an iconic, high quality office property like Q22. Given Invesco Real Estate’s extensive experience and track record in CE, we have access to such off market investment opportunities and this becomes even more important during times when there is lack of comparable opportunities. With an impressive tenant line up this demonstrates that Q22 is one of the most well-regarded assets in the city center of Warsaw and we are proud to become the new owner of it,” commented Tomas Picha, Senior Director, CEE Transactions, Invesco Real Estate.
Q22 – the recent winner of prestigious Prime Property Prize 2016 in architecture and the office investment of the year categories and CEE Investment & Green Building EuropaProperty Award (Best Office Project) – is a 155-meter-high, modern office building located in the business district of Warsaw, in the junction of Jana Pawła II and Grzybowska streets, offering 53 000 sqm of GLA. Its luminous shape has been designed by Kuryłowicz & Associates team of architects. Q22 is a 21st century office building that applies the newest technologies as well as cultural trends enabling free interior planning. It also hosts various service facilities, including 5-story parking lot (also for cyclists), restaurants, fitness club and conference rooms. Its construction used 9,500 tons of steel (the amount enough to build 190 cargo cars), 34,000 tons of concrete (twice as much as the construction of Warsaw’s Świętokrzyski Bridge had used) and 1,700 kilometers of electric cables.
“Q22 is a unique project, also from an investment process point of view. This is why, from the very beginning, it had aroused a high interest among potential buyers. This is the best proof of the investment’s quality, but also shows an enormous potential of Warsaw and Poland’s commercial real estate market. Following the sale of the whole portfolio of yielding assets to Redefine Properties, this also supports Echo’s strategy of high capital turnover and focusing on developing activity,” said Michał Obara, Investment Director at Echo Investment.
Linklaters and CBRE acted as the advisors to Echo Investment, while Greenberg Traurig and Colliers International acted in the same capacity for Invesco Real Estate.