GIC acquires stake in French office REIT

 The Singaporean state fund has acquired a 25 percent stake in the CeGeREAL real estate investment trust (REIT) as it looks to build scale in the French real estate market.

GIC Private, the Government of Singapore’s sovereign wealth fund, has agreed to acquire a 25 percent stake in CeGeREAL, an office-focused real estate investment trust (REIT) based in Paris from the New York-based real estate investment firm Northwood Investors.

Northwood reportedly held 98.44 percent of French real estate management company CeGeREAL’s capital. However, following Thursday’s transaction, the firm now holds 59.78 percent of the Paris-based real estate management company. It reportedly sold 41 percent of its share in French real estate management company CeGeREAL, with the chief beneficiary being the Singaporean sovereign wealth fund GIC, which took up 25 percent of the total shareholding at a share price of €35.65, implying that 119 million in total was paid for the 25 percent stake.

French tax regulations state that no company may hold more than 60 percent of the share capital in a REIT and this reportedly triggered the deal, as the sale will allow CeGeREAL to retain its SIIC, the French equivalent of a REIT, status. At press time, Northwood had not responded to questions of how it was able to own more than 60 percent of CeGeREAL in the first place.

Northwood took over CeGeREAL last September when it agreed to take a 59.78 percent stake from Commerz Real’s HausInvest fund. It was unclear when the firm acquired the additional 41 percent that it has now sold.  

John Kukral, Northwood’s founder and director on the board of CeGeREAL, said: “Northwood believes in CeGeREAL’s vision to grow its asset base over time and to become a best in class French office REIT.”

Madeleine Cosgrave, GIC’s deputy head of real estate Europe, said: “We believe this transaction represents a good opportunity to gain exposure to a high-quality portfolio and to support management in its vision to grow CeGeREAL into a larger office platform.”

JPMorgan and Brookfield Financial advised Northwood.

As of end December 2015, the portfolio of CeGeREAL was valued at €942 million. The REIT owns three office properties in Paris: Europlaza valued at €361 million, Rives de Bercy valued at €202 million and Arcs de Seine valued at €379 million according to the 2015 annual report.

– Arshiya Khullar contributed to this story.