Hana resells $50 mn equity in Paris office; to lend on France asset

  • 2019-04-26

Hana Financial Investment Co. Ltd. has recently completed the resale of its 58 billion-won ($50 million) equity investment in a Paris office building to South Korean investors, while reportedly providing a $59 million mezzanine loan on a portfolio of real estate and business assets in France.

The resale comes half a year after Hana Financial bought 16 rue Washington, a refurbished seven-story building in the eighth district of Paris, from Goldman Sachs last October.

It acquired the property through BNP Paribas REIM for an undisclosed sum.

It was first reported by South Korean news outlet Newspim earlier this week and confirmed by a source with knowledge of the matter on April 26.

Nextdooor, a community-based social networking platform, occupies the 5,682-square-meter building under a 10-year lease.

No further financing details about the transaction were disclosed.

Hana sold it down to institutional investors and high net-worth individuals in South Korea through a small-sized domestic asset manager. It declined to be identified for this article.

For the resale, Hana offered a target return of around 8%, similar to those for French properties recently acquired by South Korean asset managers and brokerage firms.

But it took about six months to complete the sell-down, as it seems that South Korean investors adopted a cautious stance towards a growing supply of French real estates.

Low borrowing costs in Europe and massive redevelopment ahead of the 2024 Paris Olympics have been fueling South Koreans’ interest in the commercial property market in Paris and its suburban areas.

Last month Hana acquired Le Cristalia, a commercial building west of Paris, for 220 billion won.

Other upcoming real estate investments in France by South Korean institutions include Tour Majunga, a landmark building in France, in a deal worth around $1 billion and a 370 billion won acquisition of Tour Europe in the La Defense district.

Additionally, a consortium of Samsung Securities Co. Ltd. and Hanwha Investment & Securities Co. Ltd. is poised to invest 340 billion won in Lumiere building in Paris for a joint acquisition with a French investment company for around 1.5 trillion won.

MEZZANINE LOAN

Meanwhile, Hana Financial will provide around 53.3 million euros ($59.3 million) in a mezzanine loan to Colony Capital, a US investment firm, on a portfolio of 206 real estate and business assets in France, the Korea Economic Daily TV reported last week.

The financing is part of a credit package that Colony Capital has raised to fund the purchase of the assets used by French power utility EDF and its subsidiaries.

In November 2018, EDF announced that it had closed the sale of a portfolio of more than 200 real estate and business assets owned by EDF Group to Colony Capital for undisclosed terms.

For the mezzanine debt investment, Hana will launch a domestic fund with a maturity of five years and two months, according to the report.

By Hyunil Lee

hiuneal@hankyung.com

<Edited by Yeonhee Kim>

(Photo: Getty Images Bank)