[THE INVESTOR] NH Investment and Securities is seeking to purchase the Paris headquarters building of L’Oreal, Maeil Business News reported on March 9.
The price is expected to be about 900 billion won (US$779 million), which will be the Korean securities firm’s largest-ever purchase.
L'Oreal headquarters in Paris
The report said NH I&S has agreed to purchase the Ecowest building, in northern France, and is in the final stages of negotiation.
The firm expects to finalize the deal after due diligence in the first half of this year after organizing funds through domestic asset management companies.
NH I&S plans to finance its acquisition by investing about 360 billion won of its own capital along with loans from other local financial institutions. In addition, the securities firm plans to issue a public offering for individual investors with the shares it has purchased.
“L’Oreal is a long-standing global firm that has leased the building for more than 10 years, so vacancy risk is low and stable rental income can be secured. After this investment, domestic securities companies including NH I&S are expected to invest more in overseas real estate,” an industry source was quoted as saying.
NH I&S’ first overseas property investment is expected to intensify competition as Korea Investment & Securities and Mirae Asset Daewoo have already established themselves in the market.
Korean institutional investors have been keeping a close eye on the European real estate market as the US market has been clouded with uncertainty since President Donald Trump took office.
Europe has maintained its low real estate interest rates while the possible increase of the Federal Reserve’s benchmark rate will increase US rates.
By Alex Lee (firstname.lastname@example.org)