JR AMC acquires $194 mn French office building for Hana Fin

  • 2019-03-16

le-cristalia

South Korea’s JR AMC Co. Ltd. has acquired a commercial building west of Paris for 220 billion won ($194 million) on behalf of Hana Financial Investment Co. Ltd., following a string of recent property acquisitions by South Korean companies in Paris and its suburban areas.

Tishman Speyer, a US real estate investment firm, sold Le Cristalia, completed in 2002, to JR AMC,  a real estate investment trust manager,  according to sources with knowledge of the matter on March 15.

The renovated seven-story building is entirely leased to Bristol-Myers Squibb Co., a US pharmaceutical company. It is located in the town of Rueil-Malmaison, about 10 km west of Paris’ central business district.

JR AMC expects the property deal to yield 8.5% after euro/won currency hedging, and hopes the transaction to help source new investments through Tishman Speyer.

The acquisition took place just after a consortium between Hana Financial and NH Investment & Securities Co. Ltd. lost a bid for Tour Majunga, a skyscraper in La Defense, a short distance from Rueil-Malmaison.

In Le Cristalia with a floor area of 20,222 square meters, Hana made an equity investment through a vehicle of JR AMC. But it was not known immediately how much capital Hana put into the acquisition.

The South Korean brokerage company is reselling the equity investment to other domestic institutional investors.

Amid uncertainty over Brexit, South Korean investors have zoomed in on Paris and its suburban areas, the largest real estate market in continental Europe, which are undergoing massive redevelopment ahead of the 2024 Paris Olympics.

They expect to secure yields of 7-9% per year from the acquisitions in terms of the Korean currency.

Since South Korea allowed REITs to launch real estate invsetment funds in 2016, JR AMC has been ramping up global investments.

Last year it acquired No.2 Dublin Landings in Dublin on behalf of Hana Financial Investment. The eight-story building is leased for 20 years to flexible workspace group WeWork.

In 2017, the company purchased the headquarters building of Porr AG, a European construction company, in Vienna for 60 million euros ($71.2 million) on behalf of two South Korean institutional investors.

By Daehun Kim

daepun@hankyung.com

<Edited by Yeonhee Kim>