Union Investment and Blackstone today announced that funds associated with Blackstone Real Estate will acquire the Centre d'Affaires Paris Trocadéro, a mixed-use property in the 16th arrondissement of Paris. The purchase price of around € 700 million is higher than the most recent appraisal value of the property. The transaction has already been signed, and the transaction is expected to close in the fourth quarter of the year.
With a lettable area of around 41,000 square metres, the Centre d'Affaires Paris Trocadéro is located on Place du Trocadéro, directly opposite the Palais de Chaillot.
The property was originally built in 1913 by Société Générale as a bank building and was transformed into a mixed-use complex with multiple tenants in the early 1990s. The Centre d'Affaires Paris Trocadéro was acquired by Union Investment in 2003 for its open-ended real estate fund UniImmo: Deutschland for a price of 284 million euros. Over a holding period of more than 22 years, the property has provided the UniImmo: Deutschland fund with steady income and a significantly above-average increase in value.
Following the Fünf Höfe in Munich and Finsbury Circus House in London, the transaction marks the third successful sale of a major property from Union Investment's open-ended real estate funds, which have been held in the funds for more than 20 years.
Martin Schellein, Head of Investment Management Europe at Union Investment Real Estate, says: "During our long holding period, we have continuously improved the rental space and the range of services offered at the Centre d'Affaires Paris Trocadéro, thus increasing the value for our investors. Following its acquisition by Blackstone, this exceptional business center is now entering the next phase of its development."
Karim Esch, Chief Investment Officer and Member of the Management Board of Union Investment Real Estate GmbH, says: "We intend to use the proceeds from the sale of the Centre d'Affaires Paris-Trocadéro and other real estate sales for UniImmo: Germany to selectively invest in smaller properties at the beginning of a new real estate cycle, further diversify the fund's portfolio and generate higher returns in line with our ESG standards."
Paris' central business district continues to have some of the strongest fundamentals in the European office market, driven by continued high demand and subdued new business. The availability of Grade A office space has been below two percent for over a decade.
James Seppala, Head of Real Estate Europe at Blackstone, says: "The Centre d'Affaires Paris Trocadéro is a prestigious property in one of Paris' most sought-after locations. This acquisition underlines our confidence in the European office market and our belief that the right properties in prime locations, combined with our capital and extensive asset management capabilities, continue to offer attractive opportunities for value creation."
Union Investment was advised on the transaction by CBRE, Thibierge Notaires, CMS Francis Lefebvre (legal) and Simmons & Simmons (tax). Blackstone was advised by Attal & Associés (notarial), De Pardieu Brocas Maffei (legal), Darrois Villey Maillot Brochier (tax) and CBRE (technical and environmental).
