EUROPE - An unnamed German pension fund has acquired a Paris office building for €17.5m through a Spezialfond operated by iii-investments.

The unit, in the French capital's 2nd arrondissement, was said to be in a prime location, according to iii and had been "extensively" renovated in 2008, now standing fully let.

Reinhard Mattern, managing director at iii argued that Paris still offered attractive investments despite the spreading debt crisis.

"Although the sovereign debt crisis has reached France as well alongside with rising government bond yields, prices for office properties in the Paris CBD remained stable over the last months due to the shortage of core investments," he said.

Mattern added that investors were taking advantage of a yield gap between properties and French government bonds. 

"Furthermore, as a result of the small number of completions we are still expecting a slightly increasing rental market in the Paris CBD," he added.

The deal follows a number of smaller transactions in the Paris market, with Pramerica recently acquiring two assets for its €60m hotel fund. Operated as a joint venture with Paris Inn Group, PRECO IV spent half of its fund volume on the transaction.

Europe's largest institutional investor, the NOK3trn (€388bn) Norwegian Pension Fund Global also recently acquired a 50% stake in seven properties in Axa Real Estate Investment Management's €1.4bn Parisian office portfolio, in November following the deal with a further €290m spend on three office units in the French capital.

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