Fidelity Eurozone Select Real Estate Fund has completed its first deal in the Luxemburg market, acquiring a €100m modern office building in close proximity to Luxemburg International Airport.

The acquisition marks the Fund’s first exposure to the market as it seeks to gain exposure to a highly liquid micro location that is experiencing strong growth. 

The building was completed in 2000 and has recently undergone an extensive capital investment programme. Fully let to four institutional grade tenants on long leases, the main occupier, ATOZ Tax advisers, represents over 80% of the rental income. The asset was sourced off-market from ATOZ and structured as a sale and leaseback.

Aymeric de Sérésin, Portfolio Manager at Fidelity International, said “The acquisition marks a significant drawdown of client capital after our successful €300m capital raising event last year, meaning just €85m remains to be invested. Luxemburg is an attractive market, offering good and solid fundamentals with a sizable existing modern office stock, backed by a significant and sustainable letting demand. Luxembourg is a market where we wish to increase our exposure, not only within the office sector but also within the retail sector. We believe in the long-term growth of the economy and, as worker numbers increase, this will create a need for office stock over the short to medium term.”  

The Fidelity Eurozone Select Real Estate Fund is aimed exclusively at institutional investors and invests solely in core Eurozone markets.