Blackstone, Kuwait Investment Authority (KIA) and three property investment firms are vying for Sony Center in Berlin which South Korea’s National Pension Service (NPS) has put on the block in a transaction expected to fetch around €1.1 billion ($1.3 billion), according to a newspaper report.
NPS has received bids for the commercial complex in Germany from global institutional investors in a closed bid process recently. It is aiming to select a preferred buyer as early as this month and close the deal later this year, the Maeil Business Newspaper said on July 18.
Other than private equity firm Blackstone and sovereign wealth fund KIA, Canada-based Oxford Properties, Hong Kong’s Wheelock Properties, and US real estate developer Aby Rogen participated in the limited competition.
If the sale goes through, NPS may nearly double its investment in the German property, as commercial real estate prices in Europe have soared in the past few years.
The asset value of Sony Center is estimated at €1.1 billion, up from €586 million at which NPS acquired it from a Morgan Stanley real estate fund in June 2010.
Including dividend incomes earned from the complex, NPS is likely to pocket more than 700 billion won ($623 million) from the property investment, according to the newspaper.
“NPS did not set a timeline for the investment at the beginning. But it seems that they made a conclusion the asset has already reached their target return,” the daily quoted an unnamed source familiar with the NPS as saying.
Sony Center, located at the Potsdamer Platz, has residential, office, restaurant and recreational space.
The 130,000-square-meter complex is almost fully rented. Tenants include Deutsche Bahn, Sanofi-Aventis and Facebook.
<Edited by Yeonhee Kim>