Canadian pension investor OMERS - acting through its real estate arm Oxford Properties - is acquiring the Window office building being redeveloped in Paris' La Défense business district. PropertyEU Research estimates the price at above €500 mln.
Oxford Properties announced on Thursday that it had exchanged contracts with owner, French insurer Groupama, for the 44,200 m2 building 18 months before the completion of a redevelopment programme. The acquisition is due to complete in October 2018 when the work remodelling is finished and the building is occupied.
The price was not disclosed but Oxford Properties did say that the deal brought its investment in Paris to over €1.3 bn, across four properties.
PropertyEU Research records the reported or estimated volumes for the other three assets were as follows: 32 Rue Blanche (€263 mln); 92 Avenue de France (€200 mln) and the PariSquare office complex in Paris Bastille (€250 mln). This leaves €587 mln, but it is believed the Window complex changed hands for a sum closer to €500 mln given that it is a forward purchase of a redevelopment.
The refurbishment programme is being carried out by American architect Kohn Pedersen Fox and French architect SRA with Eiffage as the general contractor and Hines as the project manager. Window has been fully pre-leased to French electricity transmission system operator, Reseau de Transport d’Electricite (RTE) on a new 12-year firm lease, commencing in October 2018.
Focus on Europe
Having sold down over €2 bn of assets in London since 2015, Oxford is now looking at growing its platform in Continental Europe, with a focus on Paris and Berlin.
Established in the 1960s, La Défense is the largest purpose-built office business district in Europe and was specifically designed to meet companies’ demand for large and modern office buildings in Paris. With 3.4 million m2 of office space, La Défense is twice the size of Canary Wharf in London. Comprising mainly high-rise office towers, it is home to 2,950 businesses with about 180,000 employees. With the highest concentration of Fortune Global 500 companies in Europe, La Défense is said to be the location of choice for domestic and international corporate headquarters.
Michel Vauclair, senior vice president and chairman of commercial real estate Europe at Oxford Properties, said: 'Window is located on La Defénse’s central esplanade, providing a highly visible, world class and efficient office space for RTE’s 2,900 employees. The building is completing a major refurbishment, which will include a 250-seat auditorium, fitness centre, on-site staff restaurant, concierge and a stunning green terrace. It is our fourth acquisition in Paris and brings our assets under management over €1.3 bn, enabling us to reach a critical mass in this market and exposure to the highest growth submarkets.'
The Window acquisition is due to complete in October 2018.
Oxford Properties engaged Hines as investment advisor, Lacourte Raquin Tatar as real estate legal advisor, Bredin Prat as tax and structuring advisor, Lasaygues & Associés as notary and finance legal advisor and Artelia as technical advisor.
Groupama was supported by Paris-based consultancy Etude Wargny Katz and law firms Allen & Overy and Arsene Taxand.
Established in 1960, Oxford Properties manages over CA$40 bn (€27.5 bn) of real estate assets on behalf of OMERS and investment partners, with a global portfolio spanning over 5.6 million m2. OMERS is the the pension plan for Ontario's municipal employees.
