China’s SAFE in bid to buy French shopping centre
15 Oct 2013
China's State Administration of Foreign Exchange (SAFE) is seeking to acquire a large shopping center in Paris, the French newspaper La Monde reported today.
The move is seen by analysts as the Chinese giant's bid to diversify its investment portfolio into European high-end commercial real estate market, away from US government bonds.
SAFE, managing China's $3.4 trillion in foreign exchange reserves, , the world's largest reserves, is said to be among the potential bidders to buy the Beaugrenelle shopping mall situated in the prime location in Paris.
If the deal goes through, this will make it one of the most expensive retail spaces in France with an approximate value of the potential purchase at least 700 million euros ($947 million).
The shopping mall is owned by Gecina SA, a French real estate investment trust (85 percent), and the APSYS Group, a commercial property operator.
Given the shopping center's ideal location it is expected to offer safe and stable investment returns in the long term and so the acquisition is a logical move for SAFE, according to the industry experts.
According to the report, the other four potential bidders are French real estate company Altarea SCA, British property investment company Hammerson Plc, US-based real estate fund Rockspring Property Investment Managers LLP and German fund Union Investment.
The Beaugrenelle shopping center represents an investment of more than 450 million euros. It is scheduled to open on October 23 with 120 shops, one department store, a 2,000-seat cinema and a dozen restaurants with a view of the River Seine.
