Swiss Life Asset Managers is poised to acquire a prime office portfolio in Paris’ central business district from French listed property firm Terreïs.
The giant asset manager said on Tuesday it has signed a memorandum of understanding with Terreïs to acquire 28 office buildings valued at €1.7 bn. The purchase price was not disclosed. Transfer of ownership is expected to take place by Q2 2019.
The assets will be acquired by real estate funds managed by Swiss Life AM entities in Switzerland, France, Germany and Luxembourg. Swiss Life said they provide ‘unique access’ to the Paris CBD office market for its clients.
Situated in the heart of the French capital, the Haussmann-style buildings are mainly located across the 1st, 2nd, 8th, 9th and the 10th district.
Frédéric Bôl, CEO France of Swiss Life Asset Managers, said: ‘We are proud to secure this exceptional portfolio in the Paris office segment, which is highly sought after by our clients. The availability of major transactions in Paris is limited and the assets we are seeking to acquire are currently a rarity in the market. We are thus providing to our clients unique access to the Paris CBD office market and enable them to invest in high quality, rarely accessible buildings, in prime locations but with a reversionary rent potential we can capture via our asset management.’
Low vacancy rates and rising rents in Paris’ office sector make investments in the French capital highly sought after, according to Swiss Life. Furthermore, new office developments are rare in the French capital, particularly in the CBD area where supply has increased by only 6% over the past 40 years.
Terreïs assembled most of the office portfolio between 2009 and 2014 when it was an active buyer of offices in the French capital.