Credit Suisse Group AG (CSGN) sold an office complex in Zurich to Norway’s $660 billion sovereign- wealth fund for 1 billion Swiss francs ($1.08 billion) as the Swiss lender tries to boost its capital.
Norges Bank Investment Management acted as the buyer on behalf of the Norway Government Pension Fund Global, the Zurich- based bank said in a statement today. The Uetlihof office complex is about 3 kilometers (1.9 miles) southwest of Zurich’s center, according to Credit Suisse.
“The transaction marks the fund’s first property investment in Switzerland,” Karsten Kallevig, chief investment officer for real estate at the Norwegian fund, said in a separate statement.
Credit Suisse, the second-largest Swiss lender after UBS AG, is selling the building to strengthen its capital position amid stricter regulation. It plans to cut 1 billion francs in annual costs by the end of 2014, adding to a 1 billion-franc savings program from July and a 2 billion-franc expense reduction achieved since last year.
The Swiss bank will lease the property, which has 174,000 square meters (1.87 million square feet) of rentable space, for 25 years starting today. It can extend its lease by as many as 15 years, according to the statement.
The Norwegian sovereign-wealth fund, the world’s biggest, and Axa Investment Managers SA last month agreed to buy two buildings in Frankfurt and Berlin for 784 million euros ($1 billion) in the biggest German commercial real estate transaction this year. The properties were sold by Royal Bank of Scotland Group Plc in a deal that will probably be completed by the end of the year, Axa Real Estate and Norges Bank Investment Management said in separate statements on Oct. 10.
Credit Suisse rose 2.1 percent after Bank of America Corp. added it to a list of most preferred lenders. The shares were up 44 centimes to 21.93 Swiss Francs at the close of Zurich trading, giving the company a market value of 28.95 billion Swiss francs.
Switzerland’s economy returned to growth in the third quarter as it expanded to the fastest pace since 2010 on increased exports. Gross domestic product rose 0.6 percent from the second quarter, when it fell 0.1 percent, the State Secretariat for Economic Affairs said in Bern today.
To contact the reporter on this story: Chris Spillane in London at email@example.com.
To contact the editor responsible for this story: Ross Larsen at firstname.lastname@example.org.