BNP Paribas and Crédit Agricole extends competitive €450m seven-year Tour First financing

AXA Investment Managers Real Assets has secured a €450m seven-year senior loan to finance its acquisition of Tour First office tower, France’s tallest building, from BNP Paribas CIB and Crédit Agricole CIB.

AXA IM paid €825m, on behalf of a club of investors including Assurances du Crédit Mutuel, to acquire the tower block from Beacon Capital Partners, via a share deal

The price paid for France’s tallest building reflects the strengthening of the La Défense business district and low cost of debt secured from BNP Paribas and Crédit Agricole.

CoStar News understands that the purchase price reflects a 4.4% net initial yield for the 44-storey office building in the La Défense business district of Paris.

The €450m seven-year senior loan, at 55% LTV, was priced at 115 basis points over three-month Euribor, CoStar News understands, illustrating highly competitive debt pricing which can be achieved for prime assets in Europe’s largest cities.

Tour First is currently 83% let on long leases to two global blue-chip companies.

In a research note dated 14 December 2015, Green Street Advisors wrote: “Supply is modest in Paris CBD and La Défense suggesting a pick-up in demand could push rents notably higher” adding that the “window of opportunity for corporates to strike rental bargains in La Défense [was] likely to close soon”.

Green Street citied reports that some tenants were speeding up negotiations in La Défense “to secure still-attractive deals”.

Originally built in 1974, the tower was sold for 50% to Beacon Capital Partners by AXA IM on behalf of one of its clients in 2007.

AXA IM and Beacon Capital Partners then undertook a comprehensive €300m re-development programme between 2007 and 2011.

All parties declined to comment.

About CoStar News

Finance Editor, CoStar News
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