FINANCE | 10.23.2020
MAPFRE acquires a property in Luxembourg through its real estate fund with GLL
The vehicle has now invested 150 million of the 300 million euros that MAPFRE, its German partner and other institutional investors committed
MAPFRE has acquired an office building in Luxembourg, currently home to the law firm Clifford Chance. Office space makes up 82 percent of the 5,195-square-meter property, which is located in the heart of the city’s financial district and holds BREEAM sustainability certification.
The transaction, made through a share deal, i.e. the purchase of the company that owns the asset, was executed through the SIEREF-GLL fund launched with its fund management partner GLL Real Estate Partners (Macquarie Group). The agreement, signed in the first quarter of 2018, envisaged investing up to 300 million euros in premium offices in the main eurozone office markets within two to three years. Since then, 150 million has already been committed through the purchase of buildings in Paris, Hamburg, Milan and Luxembourg. MAPFRE contributes 50 percent of the fund’s capital, with the balance coming from a group of six institutional investors, mostly in the insurance sector, including GLL itself.
In funds-led real estate investment, MAPFRE also runs a joint venture with Swiss Life Asset Managers France, through which the 375 million euros committed for the purchase of prime properties in Paris has already been invested. In terms of alternative investment, alongside its commitments in the real estate market, MAPFRE launched two funds of funds this year with its partner Abante. The first is dedicated to private equity and involves an agreement with Altamar, and the other is an infrastructure fund built on underlying funds managed by Macquarie.
These latest investments reflect the insurance group’s strategy of diversifying its portfolio to include other types of financial assets, gradually increasing its alternative investments in a bid to protect profitability against the prevailing climate of historically low interest rates. In the same vein, the Board of Directors authorized another 500 million euros in alternative investments in mid 2019, in addition to the 550 million already approved.