Helaba finances Korean investors’ Paris purchase

The German bank has backed a consortium led by Hyundai Investment Asset Management.

Germany’s Helaba has provided acquisition finance for Le Balthazar, an office building on the outskirts of Paris.

The eight-story building was acquired by French asset manager La Française, on behalf of Hyundai Investment Asset Management and a group of Korean securities companies. The purchase price was undisclosed, but Korean media reported a deal of €235 million. AEW acted as seller on behalf of Caisse des Dépôts and another institutional investor.

Neither Helaba nor La Française disclosed the terms of the loan, although Real Estate Capital understands the facility is between €100 million and €150 million, with a loan-to-value ratio in the region of 50 percent. The loan is understood be priced below 140 basis points.

The acquisition of Le Balthazar illustrates the ongoing trend of increasing flows of capital from institutional Korean investors into European real estate, targeting large markets such as Paris or London, which are seen as safe, long-term bets.

In early June, for instance, Germany’s DekaBank provided a £204.6 million (€232.2 million) loan to finance the purchase of the 20 Old Bailey office building on the City of London’s western fringes for Korean buyer Mirae Asset Global Investment. The five-year loan is understood to have a circa 60 percent loan-to-value ratio, with a margin below 140bps.

Le Balthazar, with an area of circa 35,000 square metres, is comprised of two wings, connected by an atrium. Prior to its sale, AEW refurbished the building and secured a new nine-year lease with a blue-chip tenant. The property has also two retail units, with a total area of 590 square metres, let to food service companies, La Française said.

The asset manager noted this prime acquisition shows Korean investors’ interest to diversify their real estate portfolios, as they are “convinced of the attractiveness of the French real estate market and its upside potential given the development of the Grand Paris project and the future Paris 2024 Summer Olympic Games”.

“La Française is gaining traction in the Asian market,” said Shawna Yang, the firm’s director of real estate investor relations for Asia.

“With a seven-year-long track record and €1.5 billion invested across four countries in Europe, we have proved we are able to source products that meet Korean investors’ expectations,” Yang added.