AXA, Norges Bank acquire two German assets for €784m

The deal marks the Norwegian sovereign wealth fund manager’s first German property investment and the third that it has made in conjunction with AXA’s real estate investment arm in the past 15 months.

Paris-based AXA Real Estate Investment Managers (REIM) has formed a joint venture with Norges Bank Investment Management (NBIM) to buy two buildings in Germany. 

A joint announcement on Wednesday stated that the real estate investment arm of insurance giant AXA and the manager of the €506 billion Norwegian Government Pension Fund Global have agreed to buy two mixed-use properties in Germany from the Royal Bank of Scotland for €784 million. The deal marks the third time in approximately 15 months that the two institutions have teamed up to invest in a European office portfolio and the first time that NBIM has invested in German real estate.

The transaction, which is expected to close before the end of the year, gives each partner in the venture a 50 percent stake in each building. The properties are located in Berlin and Frankfurt and are used mainly for office and retail purposes. Payment for the properties will be split equally between the Norwegian sovereign wealth fund and AXA.

Karsten Kallevig, chief investment officer for real estate at NBIM, said in a statement that this acquisition is in line with its strategy to build its real estate portfolio “by initially investing in large, well-developed markets alongside partners with aligned interests.”

The building in Berlin, located on Kurfürstendamm Boulevard, has 72,400 square metres of office and retail space over 16 floors. The second property, located in Frankfurt’s central business district, consists of 81,600 square metres of predominantly office space. 

This transaction follows the announcement in July 2011 of a joint venture between NBIM and AXA REIM to co-invest in a €1.4 billion portfolio of seven Class A office properties in and around Paris. A subsequent co-investment into a €290 million portfolio of Paris office properties was made in November 2011.

Furthermore, the announcement of this deal immediately follows news of NBIM acquiring a 50 percent stake in Meadowhall, one of the largest shopping centres in the UK, from a venture between London & Stamford Properties and Green Park Investments. That transaction values the 1.5 million-square-foot Sheffield asset at £1.525 billion (€1.89 billion; $2.44 billion), including debt.