Goldman Sachs spends $119M on Paris office, retail building
“We do believe in the future of the office,” investment giant’s EMEA real estate chief says
Goldman Sachs’ asset management wing is making a 100-million-euro bet on the Parisian retail and office market.
The banking giant and its Belgium-based partner Immobel SA are buying an office and retail building in one of the city’s priciest neighborhoods for the equivalent of $119 million, Bloomberg reported.
The six-story building at 277 Rue Saint-Honoré is just one block away from the Place de La Concorde in the 8th arrondissement, a chic neighborhood that also comprises one of the city’s primary business districts.
Goldman will use client funds and its own capital in the investment, which is considered an opportunistic play.
Tavis Cannell, co-head of Goldman’s Europe, Middle East and Africa real estate operation, said the firm “never believed that cities were going to die through Covid and that everybody was going to move to the suburbs.”
“We do believe in the future of the office and continue to see bifurcation between high-quality buildings and everything else,” he said.
Last fall, Cushman & Wakefield projected that European office rents will continue to fall through 2022.
But investors see deals in the wake of the pandemic. Earlier this year, Singapore-based Mapletree Investments launched a European office fund, aiming to raise about $606 million.
Brookfield Asset Management, KKR & Co. and Tishman Speyer Properties LP are similarly buying up properties that can be turned into offices in cities around the world in the hope of attracting tenants as employees are summoned back to physical workplaces.
[Bloomberg] — Dennis Lynch