Korea Investment & Securities Co. is pursuing acquisition of Novartis AG’s office building in Paris for 400 billion won ($341 million) in partnership with U.S.-based Millennium Asset Management, according to investment banking (IB) industry on Sunday. The company has recently finished due diligence and plans to complete the investment in the next two months.

Korea Investment & Securities will put up 170 billion won and the rest will be financed with loans from financial institutions in France. The investment is expected to generate annual return of 6 to 7 percent.

The office building commanding area of 34,000 square meters is still under construction and scheduled to be completed in 2018. After the completion, it will be rented out to the global healthcare giant Novartis for 10 years. Korean Investment & Securities plans to resell its stake in the building to institutional investors in Korea, and it has already begun talks with some investors about the stake sale, according to the sources.

The investment company established investment banking (IB) group last year in order to bolster its alternative investment. Since December last year, it has joined hands with Korean asset management companies to purchase overseas properties including Louisa Lawson Building in Canberra, Australia for 207 billion won, a tax office building in Philadelphia, U.S. for 400 billion won, Amazon’s logistics center in Poland for 93 billion won and Astro Tower in Brussels, Belgium for 210 billion won.

With additional purchase of the Novartis building, the total investment of Korea Investment & Securities in overseas real estate will amount to 1.3 trillion won. Its overseas property portfolio would exceed 2 trillion won this year as it mulls another acquisition in Europe this year.

“Korea Investment & Securities has fared well so far in real estate investment and mulls two to three more building purchase in Europe,” the source said.

By Song Gwang-sup and Ko Min-suh

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