Samsung’s financial units seek to purchase $444 million OECD building in Paris

2017.06.12 17:37:52 | 2017.06.12 17:38:14

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A group of financial units under South Korea’s top conglomerate Samsung Group is teaming up to create a 500 billion won ($444 million) worth overseas real estate fund to acquire an Organization for Economic Co-operation and Development (OECD) building in Paris, France.

The overseas purchase would be the second by Samsung Group’s financial units that bought the Commerzbank Tower in Frankfurt, Germany, 10 months ago.

According to multiple sources from the investment bank industry on Monday, Samsung SRA Asset Management Co. has recently tendered a bid to buy the OECD building in Paris. A preferred bidder is expected to be selected later this month after evaluation. The purchase price is expected to be about 530 billion won. Samsung SRA Asset Management is considered a potential buyer along with other global investment firms.

The 35,000-square-meter OECD building in southern Paris is located against the Seine, which has been added to the World Heritage List by the United Nations Educational, Scientific and Cultural Organization (UNESCO). The building is currently used as the headquarters of Nuclear Energy Agency (NEA), a specialized agency within OECD that was established to research and develop peaceful use of nuclear energy. The building, which is located close to the center of Paris, is evaluated as a stable investment source as it has been rented out long term to an international organization with high-grade credit rating. The building has also been refurbished in 2013.

Samsung SRA Asset Management is expected to create a 500 billion won worth overseas real estate blind fund with other financial units including Samsung Life Insurance Co., Samsung Fire & Marine Insurance Co., and Samsung Securities Co. for the purchase. A blind fund does not have a fixed investment target for the funds raised by investors.

The board of directors of each Samsung Life Insurance and Samsung Fire & Marine Insurance has recently decided to invest 170 billion won and 80 billion won, respectively, in the fund. Samsung Securities and other major pension funds and mutual aid associations are also expected to invest in the fund

By Kang Doo-soon and Song Gwang-sup

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