Samsung Group units in forming $443 mn fund to buy OECD building in Paris

  • 2017-06-13
An investment firm of South Korea’s Samsung Life Insurance Co. Ltd is forming a blind-pool real estate fund worth around 500 billion won ($443 million) with commitments from other Samsung financial units to acquire a building of the Organisation for Economic Co-operation and Development (OECD) in Paris.
Samsung SRA Asset Management Co. Ltd., a wholly-owned unit of Samsung Life, has placed a bid for the building used as the headquarters of the OECD Nuclear Energy Agency, a deal valued at around €420 million ($470 million), according to investment banking sources on June 12.
A preferred buyer of the property is expected to be selected around later this month.

Samsung Life and Samsung Fire & Marine Insurance Co. Ltd. have recently decided to commit 170 billion won and 80 billion won to the blind-pool fund, respectively.

Samsung Securities Co. Ltd. is likely to participate in the fund, too.

It was not immediately known whether institutional investors other than Samsung Group’s units would commit to the real estate fund which Samsung SRA wants to tap for other overseas office building purchases.

The 35,000-square-meter building in western Paris is against the Seine River.

Established in 2012, Samsung SRA has launched several blind-pool real estate funds to buy equity interests or mortgage debts in the US and Europe, as well as in South Korea.

For the 310 billion won mezzanine debt fund closed last year, the company has deployed 240 billion won and is now searching for an investment target for the remaining 70 billion won.Samsung SRA also joined forces with Samsung Securities last year to acquire Commerzbank Tower, the headquarters of Commerzebank in Frankfurt, for 900 billion won.

Earlier this year the company has secured an annual internal rate of return (IRR) of over 14% from the sale of 30 Crown Place in London, a 16-story office building, to a Chinese fund for 340 billion won ($289 million).

By JiHoon Lee
<Edited by Yeonhee Kim>