Korean brokerage firm to buy Novartis campus in Paris for $454 mn: report
Sep 30, 2016 (Gmt+09:00)
Korea Investment & Securities Co. Ltd. is set to buy an office building of Swiss pharmaceutical company Novartis under construction in Paris for 500 billion won ($454 million), and plans to sell down its stake in the property to other South Korean institutional investors, according to a South Korean news report.
For the acquisition, the fifth-largest brokerage company in South Korea by capital will invest 240 billion won of its own money and borrow 260 billion won from local financial institutions, online media edaily reported on Sept. 29, citing a source of the brokerage company. Korea Investment will complete the payment for the transaction on Sept. 30 and fine-tune the contract, before signing a definitive agreement early next month.
A Korea Investment & Securities source confirmed the transaction, but declined to give details on the value and the timetable for a final agreement, saying: “Discussions for the deal are still under way.”
By selling a stake in the building to other institutional investors, including pension and savings funds, Korea Investment & Securities expects to earn a 6~7% return a year. The securities company focuses on office buildings in European cities with steady demand and low borrowing costs of around 1%. In particular, it has been buying office buildings in Poland, Belgium and France.
The property deal adds to a series of South Korean brokerage houses’ acquisitions of overseas real estate assets, with an aim to sell their stake in the buildings to domestic investors to meet soaring demand for alternative investments.