Korea’s National Pension Service has sold one of Europe’s trophy assets, Berlin’s Sony Center, to a joint venture comprising Oxford Properties and Madison International Realty for around €1.1 billion.
“This strategic defensive sale exceeded our expectations and we are poised to continue to invest in global real estate in a selective manner”
– Scott Kim
As an aggregator and long-term holder of real estate assets, it is notable that the price offered by Oxford, the global real estate arm of OMERS, and Madison was attractive enough to convince NPS to sell.
Hines, which led the sale and acted an asset manager of the Sony Center, also advised NPS when it acquired the property in 2010 from a Morgan Stanley-managed fund for €585m.
The Sony Center was one of the first investments made by NPS in Europe and the sale echoes its disposition of 8 Canada Square, also known as the HSBC building, in London’s Canary Wharf in 2014.
Similar to the Sony Center deal, the $585 billion pension fund had not actively put the HSBC building up for sale, but NPS agreed to a £1.18 billion ($1.57 billion; €1.34 billion) bid from QIA, Qatar’s sovereign wealth fund. The pension fund had bought 8 Canada Square for around £775 million in 2009.
In addition to Europe, NPS has been active in North America and Asia and its investment appetite for global real estate is still in “growth mode,” according to the pension fund.
The Sony Center, in Berlin’s Potsdamer Platz, is a 1.2 million-square-foot mixed-use building completed in 2000. The eight-building complex is one of the German capital’s most recognizable properties with large-scale office, residential and entertainment components, and attracts around 8.3 million annual visitors. Tenants include Sony, WeWork, Facebook and Sanofi.
A spokeswoman for Hines said the property’s projected holding period was seven years and the sale had “exceeded its original pro forma.”
“This strategic defensive sale exceeded our expectations and we are poised to continue to invest in global real estate in a selective manner,” said Scott Kim, head of global real estate at NPS.
Oxford and Madison have yet to comment on the transaction. Hines and NPS had not replied to requests about the sale’s return details by press time.
BNP Paribas, Eastdil, P+P Pöllath+Partners, EY and PwC advised Hines, while Oxford and Madison were advised by Greenberg Traurig and Freshfields, respectively.