RBS sells on offices to Axa and Norway in real estate unwind

Michael Bow
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ROYAL Bank of Scotland has sold two office blocks in Germany to Axa’s real estate investment arm and the Norway’s state pension fund for €784m (£631m) in a further push to unwind its asset base.

The two buildings, in Frankfurt and Berlin, are thought to be part of RBS’s German Pegasus portfolio, which it took control of from Morgan Stanley in 2010.

The deal will see Axa Real Estate and Norges Bank Investment Management, manager of the Norwegian Government Pension Fund Global, each take a 50 per cent stake in the investments.

The move marks the next chapter in Axa and Norges’ investment collaboration, following on from their tie-up to invest €1.4bn in a portfolio of seven office properties in Paris.

NBIM real estate chief investment officer Karsten Kallevig said: “This marks the fund’s first property investment in Germany. It is in line with our strategy to build our real estate portfolio by initially investing in large, well-developed markets alongside partners with aligned interests.”

The building in Berlin, which has 72,400 square metres of office and retail space over 16 floors, is located on the Kurfürstendamm, one of the most famous streets in the city. The Frankfurt building is made up of 81,600 square metres of office space.

RBS, which is 82 per cent owned by the taxpayer, was the subject of an FSA examination in October 2011 over its real estate portfolio. The watchdog wanted to know why a state owned bank was so exposed to bad property.