Royal Bank of Scotland has agreed to sell two buildings in Frankfurt and Berlin to Axa Investment Management, according to news agency reports.

Bloomberg says the properties are valued at about €790m ($1bn), according to people who were happy to disclose private information so long as their names were kept secret. Axa made the purchase on behalf of Norges Bank Investment Management, Norway's $650 billion sovereign wealth fund, one of Bloomberg's sources said yesterday.

Banks are seeking to offload property and cut back on under-performing property loans as they strengthen their balance sheets in preparation for Basel III regulations, which will impose stricter capital requirements on lenders.

Cash-rich pension funds and insurance companies, on the other hand, are happy to invest in assets which provide a steady income stream.

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