The Abu Dhabi Investment Authority plans to build a 38-story office tower in Paris’s La Defense as investors bet that rents will rise in the French capital.
A unit of the world’s second-biggest sovereign wealth fund bought the Tour Alto plot from a fund managed by UBS Group AG, according to LaSalle Investment Management, which advised ADIA on the purchase. The existing building on the site will be demolished.
Investors including Goldman Sachs Group LP and Carlyle Group LP are being drawn to La Defense, the largest office district in Europe, by cheaper properties they can build or renovate and that would benefit from an economic turnaround. Yields in the district at the end of 2015 were 5 percent compared with 3.25 percent in central Paris, according to broker Savills Plc.
A unit of Bouygues Construction SA was awarded the 200 million euro ($220 million) contract to construct the 51,000 square meter (549,000 square foot) office building, LaSalle said in the statement.