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THE INVESTOR

Deals

Korean institutional investors eye Paris real estate

  • PUBLISHED :March 15, 2017 - 16:40
  • UPDATED :March 15, 2017 - 16:58
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[THE INVESTOR] South Korean institutional investors have been eyeing the lucrative commercial real estate in Paris recently, The Bell reported on March 15.

In particular, they are targeting buildings having long-term lease contracts with multinational firms in the Levallois-Perret region. 




Samsung SRA Asset Management acquired the So Ouest office buildings from SAP for 400 billion won (US$349 million) in 2016 through a blind fund backed by domestic institutions. The long-term lease is for over 10 years.

Vestas Investment Management and NH Investment & Securities is now seeking to purchase two office buildings in the region where the main tenant is L’Oreal.

The So Ouest Plaza is reported to be worth around 600 billion won and has 9 years left on the lease contract. In addition, the Ecowest building which is on lease by NH I&S is expected to cost around 800 to 900 billion won.

“Domestic institutional investors have recently been diversifying their overseas real estate portfolio, which was previously dominated by US firms.
“The Neuilly-Lavallois region has a high demand and credit enterprise, which makes the acquisition risks low,” an industry source was quoted as saying.

It is favorable for its location, cap rate and dividend yields. It is conveniently located between La Defense and Paris CDB and has posted positive cap rate of between 3 to 4 percent, with dividend yields of between 6 to 7 percent.

Besides this region, global investors are also keeping a close watch on other lucrative areas in Parisas the city has recorded the second largest trading volume of real estate transactions behind London in recent times.

By Alex Lee (alexlee@heraldcorp.com)
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