Adviser Resource Capital Partners tells PropertyEU how Norges and Generali were alerted to the Avenue de Messine complex in Paris, yielding their first trophy deal since setting up their JV last July.
Adviser Resource Capital Partners tells PropertyEU how Norges and Generali were alerted to the Avenue de Messine complex in Paris, yielding their first trophy deal since setting up their JV last July.
The partnership set up in July 2012 by Generali Real Estate and Norges Bank Investment Management (NBIM), manager of Norway's €440 bn Government Pension Fund Global, has ramped up its French portfolio with the purchase of a fully-let office property at 9 Avenue de Messine in the eighth arrondissement of Paris.
The acquisition is the first from a third party after the two investors revealed last July they were teaming up to buy core real estate assets in the French capital.
Generali and NBIM were introduced to the transaction by Resource Capital Partners, which was advising on the purchase of the adjacent asset, 7 Avenue de Messine. ‘We started to negotiate this transaction on an off-market basis almost one year ago,’ said Stéphane Corneille of Resource Capital Partners. ‘We were looking for a small office building for our client, Spanish investment fund Metroinvest. We identified this office owned by Icade and decided to make an unsolicited offer.’
However, Icade was not keen on selling number 7 individually as the asset formed part of the same complex as number 9. Consequently, Resource Capital Partners began to look for an investment partner which would allow it to launch a bid for the entire property. Corneille: ‘We could not buy the whole complex by ourselves because the lot size was too big. But we did not want to lose the investment opportunity so we approached Generali, and proposed to them that they buy the adjacent office.’
Off-market deal
A joint bid for the entire building was presented in early 2012, with the companies signing a preliminary agreement in August. Closing took place in mid-December. Financial details were kept confidential by both parties. However, the entire building is understood to be sold in line with market value, which is estimated to be in the region of €120 mln. Corneille declined to comment on the value of the asset.
Corneille said the acquisition of 7 Avenue de Messine is an ideal fit for Metroinvest. ‘The asset was totally refurbished two years ago. This is perfect for our investor, which does not want to carry out intensive asset management. The other asset, number 9, has a shorter lease and gives Generali and NBIM potential to create more value.’
The Avenue de Messine complex was acquired by Icade through its takeover of peer Compagnie La Lucette in 2009. It had previously been bought by KanAm’s open-ended Grundinvest Spezial fund in early 2006 for €116.5 mln, which in turn sold it to French REIT La Lucette three months later for €124.5 mln.
The Haussmann-style scheme consists of two separate, adjacent buildings dating back to the 19th century which were completely renovated in 1996. It provides a total of 8,500 m2 of office space over six storeys, generating roughly €6 mln in rents. 7 Avenue de Messine is fully let to François-Charles Oberthur Fiduciaire through a nine-year fixed lease dating from April 2012. 9 Avenue de Messine provides a total of 6,260 m2 as well as 122 parking spaces. The asset is fully let to French insurer AXA with a shorter term of 3/6/9 years, reflecting a rent of €4.7 mln.
The acquisition is yet further evidence of NBIM’s efforts to expand its footprint in Europe. Last July, the Norwegian oil-fuelled sovereign wealth fund bought a 50% stake in an initial portfolio of five buildings valued at €550 mln from owner Generali Real Estate. The partnership currently owns €630 mln worth of properties totalling 43,300 m2.
In late 2012, the Norwegian pension fund also entered Switzerland with the purchase of the massive Uetlihof office complex in Zurich for CHF 1 bn (€830 mln) and made its first foray in Germany with the acquisition of two buildings for a total of €784 mln from the Royal Bank of Scotland. Last month, NBIM formed a joint venture to buy the €2.4 bn logistics portfolio made up largely of assets held by the former ProLogis European Properties (PEPR) fund.
DEAL FACTFILE
BUYER: Generali/Norges, Metroinvest
VENDOR Icade
ESTIMATED VALUE: €120 mln (total building)
ADVISOR: Resource Capital Partners for the buyers
ASSET: 7-9 Avenue de Messine in Paris
FINANCIERS: None
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