x Abu Dhabi, UAEFriday 21 July 2017

Abu Dhabi Investment Authority set for big French property deal

Adia is in advanced negotiations to buy a €750 million property portfolio from the Swiss bank UBS in what could be the biggest deal in French commercial real estate this year.

Abu Dhabi Investment Authority (Adia) is in advanced negotiations to buy a €750 million (Dh3.75 billion) property portfolio from the Swiss bank UBS.

According to filings made with the French competition commission, the Abu Dhabi sovereign wealth fund, through its subsidiary Tamweelview European Holdings, is in talks with the UBS-owned Docks Lyonnais to sign what could be the biggest deal in French commercial real estate this year.

The portfolio includes the 24,000 square metre 19th century 6-8 Boulevard Haussmann office block in the 9th arrondissement of Paris currently let to the French bank BPI as its headquarters.

The portfolio also includes a 65,000 square metre office block in Nanterre, a town in the western suburbs of Paris in which the healthcare-product manufacturer Kimberly-Clark, the telecoms equipment maker Alcatel, and the regional health authority have offices. It also includes a business park in Antony, a town in the southern suburbs of Paris and some shops in the Grolée area of Lyon.

Both Adia and UBS declined to comment.

“Gulf-based sovereign wealth funds tend to invest overseas in a quest for diversification so that they don’t have all of their eggs in one basket,” said Fadi Moussalli, the head of Jones Lang LaSalle’s international capital group.

“London is traditionally the number one destination for this capital but Paris is probably the second most popular destination,” Mr Moussalli added.

“However, at the moment we are also seeing increased interest in southern European property in Spain, Italy and Greece because funds believe properties there currently offer more value for money.”

If the deal goes ahead, it would mark Adia’s largest direct investment to date into French property.

In September, the sovereign wealth fund bought the Australian hotel group Tourism Asset Holdings giving it control of 31 properties across the country. And earlier this year Adia was reported to be in negotiations to buy 42 Marriott-branded hotels across the United Kingdom from the Royal Bank of Scotland in a US$990 million deal.

The news of the French deal comes just days after a Mubadala subsidiary, Mubadala Real Estate & Infrastructure, said it was looking at investing in property in the United States, Europe and emerging markets as it moved away from developing schemes in Abu Dhabi.

On Monday, Ali Eid AlMheiri, the executive director of Mubadala Real Estate, said a new strategy would be in place by the end of the year for the company, indicating how much it planned to invest.

lbarnard@thenational.ae

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