PIMCO and Legal & General Group Plc have been accused of placing \u201cundue pressure\u201d on property valuers in a bitter scrap over the future of a famous Brussels skyscraper whose owner has collapsed into insolvency.<\/p>\n
The owner of The Finance Tower, the 142 meter (466 feet) high building located in downtown Brussels, filed a lawsuit in the English High Court in a bid to to stall an attempt by its lenders to freeze rental income, according to documents lodged in London and New York courts. The building is ultimately owned by JR Global REIT, a property investment vehicle listed in Korea that fell into insolvency last month.<\/p>\n
JR REIT\u2019s 2020 acquisition of the building was financed with about \u20ac724 million of debt, of which almost half came via PIMCO from four Allianz SE owned entities. L&G and Sumitomo Mitsui Financial Group Inc. each provided about \u20ac135 million, while BayernLB provided about \u20ac90 million.<\/p>\n
In a New York filing seeking documents from L&G\u2019s Chicago based US unit, attorneys at Boies Schiller allege that the lenders are attempting to drive down the building\u2019s value to trigger a condition of the loan that would force cash to be retained to help pay down debt.<\/p>\n
\u201cThey were trying to manufacture a \u201ccash trap\u201d event,\u201d attorneys acting for the Finance Tower\u2019s owner said in the US filing. The lawyers allege the lenders placed \u201cundue pressure\u201d on valuers at Knight Frank LLP \u201cto reduce its valuation to a figure below \u20ac950 million ($1.1 billion).\u201d<\/p>\n
Large office buildings like the Finance Tower don\u2019t change hands often, so there can be disagreement over true value. Knight Frank resigned as the valuer and the building was appraised by JLL, who said it was worth around \u20ac920 million. This was an \u201cunreasonably low valuation,\u201d lawyers for JR Global argue. Knight Frank had produced a valuation report that placed the value closer to the \u20ac1.2 billion it was bought for.<\/p>\n
Representatives for Knight Frank, L&G and PIMCO declined to comment on live litigation. JLL didn\u2019t respond to a request for comment.<\/p>\n
Valuers from Knight Frank met with Bruno Dord, head of European debt origination at PIMCO Real Estate, in January of this year, according to a filing at the London High Court. It\u2019s alleged that Dord told them that any valuation over \u20ac950 million was \u201cridiculous,\u201d and Knight Frank resigned shortly after.<\/p>\n
Dord didn\u2019t reply to a request for comment sent to his LinkedIn account.<\/p>\n
The valuation by JLL came in far lower due to to incorrect assumptions and methodologies, the building\u2019s owners claim, including overstating the risk that the building\u2019s sole tenant, the Belgian government, could leave when the lease expires in 2034.<\/p>\n
That loan on the building came due in 2024<\/a> and the owners attempted to bring in new lenders. Ultimately, they were forced to inject additional capital to reduce the outstanding principal of the loan and the existing lenders agreed to refinance the tower with \u20ac600 million of debt.<\/p>\n While the acquisition was originally led by Korea\u2019s Meritz Securities, it subsequently listed the holding vehicle on the Korean Stock Exchange and it is now owned by 28,000 investors. In order to inject additional capital to secure the refinancing, the company issued a bond in Korea. After missing a payment on the bond, the REIT was placed into bankruptcy protection in April.<\/p>\n \u201cJR Global REIT remains fully operational,\u201d a spokesperson for the investment firm said by email on Friday. The company is using a court-supervised restructuring program to renegotiate its financial structure without entering into formal rehabilitation proceedings, the spokesperson added.<\/p>\n The Finance Tower was among the largest deals in a \u20ac20 billion wave of Korean investment into European real estate near the peak of the free money era. While those investors favored large offices with long leases to tenants with top credit ratings that provided bond-like income streams, they\u2019ve since been plagued by plunging valuations.<\/p>\n In addition to the jump in interest rates that\u2019s impacted all commercial property, the increasing capital expenditure required to improve the environmental performance of older offices and doubts about tenant demand in the aftermath of the pandemic have weighed particularly heavily on the value of large office buildings.<\/p>\n That\u2019s caused a sharp pull back in deals for offices across Europe that\u2019s been most pronounced in smaller and less liquid markets. Investment in Belgian commercial real estate has more than halved<\/a> since the peak in 2022, while office leasing in Brussels has slowed and vacancy rates have increased.<\/p>\n Just \u20ac82 million was invested in Belgian office properties in the first quarter of this year, according to data compiled<\/a> by JLL.<\/p>\n Photograph: The Finance Tower in Brussels; photo credit: Hatim Kaghat\/AFP\/Getty Images<\/p>\n Copyright 2026 Bloomberg.<\/p>\n