For 700 million euros: Union Investment sells property to Blackstone

Union Investment is selling the Centre d'Affaires Paris Trocadéro, a mixed-use property in the 16th arrondissement of Paris, to a fund affiliated with Blackstone Real Estate. According to Union Investment, the purchase price of approximately €700 million exceeds the property's most recently determined appraiser's value. The lettable area is approximately 41,000 square meters. The transaction has already been signed, and closing is expected in the fourth quarter of the year.

The property was originally built in 1913 by Société Générale as a bank building and converted into a mixed-use complex with multiple tenants in the early 1990s. The property was acquired by Union Investment for its open-ended real estate fund Uni Immo Deutschland in 2003 for €284 million.

Following the Fünf Höfe in Munich and Finsbury Circus House in London, the transaction marks the third sale of a large property from Union Investment's open-ended real estate funds, which have been held in the funds for more than 20 years.

Proceeds will be used for Unni Immo Germany

"During our long ownership period, we have continuously improved the rental space and service offering at the Centre d'Affaires Paris Trocadéro, thereby increasing the value for our investors. Following the acquisition by Blackstone, this exceptional business center is now entering the next phase of its development," says Martin Schellein, Head of Investment Management Europe at Union Investment Real Estate.

"We intend to use the proceeds from the sale of the Centre d'Affaires Paris-Trocadéro and other real estate sales for Uni Immo Deutschland to selectively invest in smaller properties at the beginning of a new real estate cycle, further diversify the fund's portfolio, and achieve higher returns in line with our ESG standards," adds Karim Esch, Chief Investment Officer and member of the management team of Union Investment Real Estate.

According to the press release, Paris's central business district continues to exhibit some of the strongest fundamentals in the European office market, driven by sustained high demand and subdued new business. The availability of Grade A office space has remained below two percent for over a decade.