AXA/Norges Bank agree to second Paris investment

Europe’s largest state fund and the real estate investment arm of French insurance giant AXA have continued their investment joint venture, agreeing to the purchase of three Paris offices for €290 million.

AXA Real Estate Investment Managers (REIM) has agreed to the purchase of a three-strong Paris office portfolio for €290 million.

The seller was not disclosed in an announcement by AXA REIM on the deal made today, with the firm stating that it was struck “off market”. The real estate investment management arm of the French insurance giant AXA said the capital for the deal came from the “AXA France Insurance Companies”.

The agreement to buy the properties follows the formation of the joint venture in July, when Norges Bank Investment Management, which manages the €400 billion Norway Government Pension Fund Global, acquired half of a €1.4 billion portfolio of seven offices in the western and central business districts of the French capital city. This subsequent investment by the partners is expected to complete by the end of the year and is slated to reflect a cap rate of approximately 6 percent.

Within the portfolio, one of the properties is located in central Paris itself, while the other two are in Boulogne-Billancourt in the western business district of Paris. Each has ground floor retail in addition to the office space.
As with the other properties in the joint venture, AXA REIM is expected to provide asset management services to the incoming assets.

Pierre Vaquier, chief executive of AXA REIM, which today has close to €40 billion of assets under management, said: “This latest acquisition for our joint venture with Norges Bank represents an excellent opportunity to secure the ownership of three prime, well located assets which benefit from a diverse base of high covenant tenants, delivering strong income for the investors.”

The deal is the latest in the nascent investment programme for the Norway state fund. Led by chief investment officer Karsten Kallevig, Norges Bank is keen to invest in the largest European property markets and to partner with investors that both own and operate properties. While initial forays have occurred in Europe, Norges Bank is expected to invest in the US and Asia in time as well.