Geneva, July 21st 2020
On June 30th 2020, AB European Real Estate Fund*, through its indirect Luxembourg subsidiary G.T. Immobilière S.A., entered into a new fixed-term lease agreement of 10 years at market value in Contern, Grand-Duchy of Luxembourg, with the Luxembourg company Truck Trading Luxembourg S.A. (“TT Lux”). As from 2021, this new tenant will occupy the warehouse part of the property with a total area of 2,490 sqm including 126 outdoor and indoor parking spaces.
TT Lux is a truck trading and repairing company, established in 1982, and is a subsidiary of the Willy van Doorne International Group, which developed a Belgium car and truck distribution business and is also active in the forest and construction business, with c. €300m annual turnover.
The warehouse is located in Contern, a major logistic hub in Luxembourg, near the airfreight cargo center at Luxembourg Airport, which is one of Europe’s major airports for this type of logistic activity. TT Lux operations are directly linked to our logistic strategy and will benefit from this key location, at proximity to the main highways, to further enhance their business.
The addition of this new tenant to the property along with the state-owned company SIGI, Syndicat Intercommunal de Gestion Informatique, for the office part and for a 6-year lease will ensure a fully let property with two strong tenants and further secures the rental income for the overall portfolio. The property will now increase the overall fund Weighted Average Lease Term by 0.4 years to 6.4 years as of end of June 2020. The property itself will show a robust and attractive 7.5y WALT.
Furthermore, the property, which represents 9.2% of the total net market value of the portfolio as of end of June 2020, benefited from a jump in value of +11.8% due to the longer cash flows and as estimated by the Fund’s independent appraiser. The Fund management team is very pleased to demonstrate that the intense asset management initiatives, which began before the Covid outbreak, were completed in time and contributed to the strong performance of the fund.
In this transaction, the fund was advised by the Luxembourg law firm Volckrick & Associates, Inowai as property manager and Savills Investment Management as asset manager.
* The European Real Estate Sub-Fund (“AB European Real Estate Fund”) is a compartment of AB Alternative Fund SICAV SIF a public limited company (société anonyme) incorporated under the laws of the Grand-Duchy of Luxembourg as an investment company with variable capital – specialized investment fund (société d’investissement à capital variable – fonds d’investissement spécialisé).