Mirae Asset Group's losses are mounting from its 2019 investment in the Majunga Tower in La Défense, France, which was the company's largest single investment. While the 2023 financial statements reflected a 50% cumulative loss, an additional 25% loss was recognized in 2024. There are concerns about further declines in asset value due to the ongoing deterioration of the office market conditions in the La Défense area. The possibility of a 100% loss, similar to the Trianon building in Germany and the Toison d'Or (TDO) building in Belgium. The year 2019 saw a surge in reckless overseas real estate investments by Korean securities firms and asset management companies, and the consequences are now being felt.

In April 2019, Mirae Asset Securities, together with Amundi Real Estate, a French asset management company, acquired the Majunga Tower (Tour Majunga) for KRW 1.083 trillion (approximately USD 796.3 million). The Majunga Tower is a 47-story, 194-meter-tall office building that was the fourth tallest skyscraper in France when completed in 2014.

Multi Asset Global Investments created the ‘Multi Asset Overseas Real Estate Investment Trust No. 6’ and ‘Multi Asset Overseas Real Estate Investment Trust No. 6-1.’ Mirae Asset Securities was left with unsold shares after failing to complete the sell-down. Mirae Asset holds 71% of the No. 6 fund and 99% of the No. 6-1 fund. Multi Asset was absorbed into Mirae Asset Global Investments in 2024.

According to Mirae Asset Securities' business report, the total capital of the No. 6 fund decreased by approximately 50%, from KRW 341.4 billion (approximately USD 251 million) at the end of 2019 to KRW 175 billion (approximately USD 128.7 million) at the end of 2023, and further declined to KRW 82.7 billion (approximately USD 60.8 million) by the end of 2024. The No. 6-1 fund decreased from KRW 105.4 billion (approximately USD 77.5 million) in 2019 to KRW 24.5 billion (approximately USD 18 million) by the end of 2024, reflecting significant asset value declines in 2023 and 2024. 

The office vacancy rate in the La Défense area has increased from below 5% in 2019 to 15% in the second quarter of 2024. According to Deloitte, the vacancy rate is projected to rise to 19% by early 2025, while the Paris CBD (Central Business District) maintains a stable rate of 2.9%. The demand has shifted to downtown Paris offices as remote work decreases following the end of the COVID-19 pandemic. French media reports suggest that most buildings in the La Défense area are over 20 years old, raising concerns that the vacancy rate could exceed 40% within the next 10 years without additional investment and renovation.

A foreign asset management company representative stated, "The reckless office investments in La Défense by Korean institutions are backfiring," and added, "It is expected to be difficult to handle future CAPEX (capital expenditure) requests from office tenants." Additional loans are challenging due to LTV (loan-to-value) restrictions, and attracting further investment from existing investors is even more difficult.

This article was published in Corebeat on April 16, 2025.