NorthStar Europe swept up by AXA for €1.1bn for single client

After what must have been a complicated bidding process, given the valuable assets up for grabs, the Paris-based AXA Investment Managers - Real Assets emerged as the winner for a portfolio of prime European offices worth €1.1bn with the acquisition of NYSE-listed Northstar Realty Europe. The coup gives the French group a prime portfolio of office space in Europe’s biggest markets.

AXA IM - Real Assets said it has agreed to offer the real estate investment trust’s shareholders $17.03 (€15.08) for each share held, giving Northstar a market capitalisation of around $850m. AXA IM - Real Assets said it was acting on behalf of a single client on the deal.

Northstar had already announced last November that it was reviewing its options, including a possible sale of its entire European division, in the interests of maximizing shareholder value.

Among NorthStar’s European assets are a 68,000sqm German portfolio of six office assets including three in the city centre of Hamburg, with the remaining three in Cologne, Münster and Berlin. It also owns two hotels in Berlin with a total of 334 rooms over 12,000 sqm. Northstar sold its trophy Frankfurt office tower, The Trianon in the central business district, last year.

In the City and West End of London it has a further two assets totaling 22,000 sqm, while in central Paris it owns four office properties with a total of 32,000 sqm. The London assets are Portman Square, an 18th-century central London building, and Condor House, located in the churchyard of St Paul’s cathedral. The Parisian properties are in Boulevard Macdonald and Marceau Avenue; and Germany includes the Parexel in Berlin.

Overall, the office portfolio is 96% let, with an average WALT of 5.9 years, and offers further upside potential, said AXA.

AXA IM’s client is financing the deal through equity financing and its available cash resources, said AXA, noting that the transaction was not subject to any financing conditions.

John O’Driscoll, European head of transactions at AXA IM – Real Assets, said the acquisition is a rare opportunity to secure a significant portfolio of prime modern European offices in a single transaction. “The properties, which are located in the major cities of Europe’s largest economies of France, the UK and Germany, have high occupancy and produce strong levels of income that are ideally suited to our clients,” he said.