Joint firepower lets NBIM and AXA hit big targets in Europe

German towers buy is third joint big deal for insurer and Norway’s wealth fund, writes Lauren Parr

Norges Bank Investment Management and AXA Real Estate Investment Managers have found in each other like-minded investors, having recently landed their third deal together in little over a year.

Their €784m purchase of two office towers from Royal Bank of Scotland’s Pegasus portfolio was NBIM’s first German investment. The deal sat nicely with the Norwegian sovereign wealth fund’s strategy to build its real estate portfolio by investing in large, well-developed markets alongside partners with aligned interests.

AXA REIM, acting for AXA France Insurance Companies, helped NBIM enter the market through its local German team, which sourced the assets, while at the same time allowing AXA France to diversify into other European markets. It is targeting large deals for property with core characteristics and asset management potential, and has the UK in its sights, according to AXA Real Estate chief executive Pierre Vaquier.

Last year, separate from the partnership, NBIM bought a 25% stake in Regent Street from the Crown Estate for £492m, as a first step in its drive to invest up to £15bn in property over the next three to seven years, funded by income from Norway’s oil and natural resources. The campaign is being led by Karsten Kallevig, chief investment officer for property, and NBIM’s initial targets were London and Paris.

Paris deal sealed the partnership

The joint venture kicked off in July 2011, when AXA sold NBIM 50% of a portfolio  of seven offices in and around Paris, worth €1.4bn and previously owned by its French arm. AXA continues to manage the assets. The partners made a subsequent €290m co-investment in three Paris offices in November 2011, which they bought from liquidating German open-ended fund SEB.

In their latest deal, each partner will take a 50% stake in Berlin’s 16-floor Kurfürsten-damm Boulevard tower and the 878,340  sq ft Die Welle tower in Frankfurt’s central business district. The cash purchase is expected to be completed by the end of the year. The partners have liaised with RBS through Jones Lang LaSalle, which advised the bank on the disposal.

RBS took back the Pegasus offices and shopping centre portfolio in April 2010 when the loan became under water and borrower MSREF declined to inject fresh equity. The assets were held in the bank’s West Register property arm. RBS had originally planned to securitise the €1.86bn of debt it provided for the portfolio, which MSREF bought in 2007.

AXA REIM’s and NBIM’s first joint UK investment could be next up, as it is the only market both parties are targeting that the venture hasn’t yet invested in. They have made it clear that the partnership is  a long-term one: AXA’s strengths are in sourcing and managing assets, while NBIM has plenty of equity.

LaSalle makes Quantum leap with $1bn Plaza Global REP joint venture

“We launched Plaza Global Real Estate Partners with a view to targeting good-quality, long-term investments located in major mature real estate markets around the world,” Jeff Jacobson, CEO of LaSalle Investment Management, announced earlier this year.

LaSalle was selected by Swiss-based asset manager Quantum Global to set up the joint venture after a bank-led process during 2011. Owned by Jean-Claude Bastos de Morais, Quantum focuses on advising central banks and sovereign wealth funds, as well as wealthy private investors.

The joint venture is believed to have around €500m of discretionary equity for Plaza Global REP; LaSalle’s parent company, Trophy building 23 Savile Row in London’s Mayfair was the partners’ debut acquisition Jones Lang Inc, has provided co-investment capital of more than 5% and the venture will be conservatively geared up to $1bn.

Property Week reported earlier this year that Plaza Global REP is acting as principal on behalf of Angola’s sovereign wealth fund Fundo Soberano Angolano. LaSalle and Quantum have not confirmed this, but have said they may syndicate ownership of some of their investments more widely.

The joint venture’s first acquisition  was 23 Savile Row in Mayfair, for around  £220m. The 103,000 sq ft trophy asset was developed in 2009 and is let at rents of more than £100/sq ft. Irish investor D2 Private was the vendor.

The partners bagged their second acquisition last month, buying a 49.5% interest in New York’s 521 Fifth Avenue, at the junction with East 43rd Street, from SL Green Realty Corp. The joint venture is targeting assets in excess of $100m in France, Germany and Australia as well as the UK and US.