GIC looking to offload €500m Paris offices

The Singaporean state fund is reportedly in talks to sell the offices to Societe Generale's insurance unit.

The Government of Singapore's sovereign wealth fund, GIC Private, is negotiating the sale of two Paris office properties to the insurance arm of Societe Generale, according to a Bloomberg report.

The two adjacent properties, on Rue d'Astorg and Rue de la Ville-l'Eveque, are valued at around €500 million, added the report, which cited people with knowledge of the discussions.

The state fund had earlier this year been an investor in Paris's office market. In April GIC acquired 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.

“As a long-term value investor, GIC is keen to build scale in the French real estate market. 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,” Madeleine Cosgrave, deputy head of real estate, Europe at GIC, commented at the time.

The Paris office market has slowed in 2016 after an incredible sprint at the end of 2015 when Q4 investment volumes reached a record of €8.6 billion, according to data from property services firm JLL. Investment volumes for Q1 2016 stood at €1.79 billion, half the level recorded over the same period in 2015, the data said.

One of the biggest Paris office deals so far in 2016 was AXA Investment Managers – Real Assets acquisition of the iconic Tour First office tower in Paris-La Défense. The deal value was undisclosed, but PERE understands AXA IM paid around €800 million for the core property.