German fund manager Commerz Real has announced the sale of its Euro Alsace office building in Paris to Union Investment for an undisclosed amount.
Located in the 10th arrondissement close to Gare de l’Est station, the property has been owned by Commerz Real’s CFB 165 closed-ended real estate fund since 2007.
Union Investment acquired the office building for its institutional open-ended real estate fund UniInstitutional European Real Estate.
Dating from the late 19th century, the building comprises a total area of 16,000 m2. The sole tenant of the six-storey property is the French state-owned railway company ÉPIC SNCF (Établissement Public à Caractère Industriel et Commercial Société Nationale des Chemins de Fer Français). ÉPIC SNCF extended its lease for the entire space in 2016, ahead of a 2024 expiry.
'That laid the foundation for us to achieve a solid result for our investors,' said Heiko Szczodrowski, head of Portfolio Management Asset Structuring at Commerz Real.
Union Investment's French portfolio now totals almost €3 bn
Martin Schellein, head of Investment Management Europe at Union Investment Real Estate: 'Since Paris’s central business district is expanding, we expect the micro-location to become even more attractive in the future. As an investor with a focus on the long-term, we therefore anticipate the property continuing to generate strong rental income.'
Following the transfer of the Euro Alsace office building, Union Investment now holds 17 office and retail properties in France worth a total of approximately €2.8 bn.
Commerz Real was advised by real estate consultancies Knight Frank and BNP Paribas Real Estate and on legal and tax aspects by GGV Grützmacher Gravert Viegener. Union Investment was advised on legal aspects of the deal by Thibierge & Associés and Clifford Chance, and on tax aspects by PWC.
