Avignon Capital sells Fontanella asset in Barcelona for €65m

Avignon Capital has sold Fontanella 6-8, a prime office and retail asset in Barcelona, for €65m, producing a 135% return on equity.

The asset is an 8,126 sqm property situated on the corner of Plaça de Catalunya, one of the busiest tourist locations in Barcelona. The property benefits from a prime retail and commercial position in the city centre, with Passeig de Gracia and Les Rambles immediately to the North and South.

Arranged over basement, ground floor and six upper levels, Fontanella 6-8 was fully let to the Government of Catalunya and occupied by the Tax Administration of Catalunya upon acquisition in Q1 2013.

The business plan on acquisition was to maintain the secure income from the Government of Catalunya, whilst simultaneously creating a new retail offering through reconfiguration works on the ground and first floors. In 2015, a new 10-year lease with annual CPI indexation was agreed with Media Markt, the leading European consumer electronics retailer, who began trading from Fontanella following the completion of upgrade works in December 2016.

Avignon Capital’s asset management initiative to let the upgraded ground and first floor to an international retailer increased the passing rent and value of the building.

 

The Fontanella sale marks Avignon Capital’s third significant property disposal of the year, all of which have resulted in strong returns on equity for investors. In January 2017, the firm sold its Copenhagen prime retail portfolio for €119m, producing a 154% return on equity; in February 2017, the firm sold Østensjøveien 27, a prime office building in Oslo, for €61m, producing an 87% return on equity.

Eric Mounier, CEO at Avignon Capital, said: “The sale of Fontanella 6-8 is another prime example of Avignon Capital’s ability to execute an innovative asset management strategy to significantly increase the value of an asset, as well as secure impressive returns for our investors.

“Not only does our team have the expertise and knowledge to enter key markets at the right time, but Avignon can extract further value by creating an exceptional retail space in the building and securing long income to an excellent tenant. We continue to seek opportunities to generate fantastic returns for our investors and further our exposure in key European real estate markets.”

Avignon Capital were advised by Garrigues for the deal.

The below video provides a time lapse of the building works at Fontanella 6-8.

Timelapse Fontanella from Avignon Capital on Vimeo.