ANALYSIS: AXA Immoselect clears the decks ahead of wind-up

AXA Real Estate's open-ended Immoselect fund continues to shed assets at a discount ahead of its termination in 2014. PropertyEU has the details on the disposal targets.

AXA Real Estate's Immoselect open-ended fund is clearing the decks ahead of its wind-up in 2014.

The fund, which was forced into liquidation in late 2011 following a wave of redemption requests, has sold its 49% stake in a portfolio of offices in Warsaw at an 18% discount to the latest appraised market value. Immoselect divested its interest in the P1 portfolio to joint venture partner CA Immo for €119 mln, compared to an appraised value of €145 mln at end-September 2013.

The package, which is worth nearly €300 mln, consists of the 7,500 m2 Saski Point office scheme, the 15,000 m2 Saski Crescent complex, the Warsaw Towers with around 20,000 m2 of offices as well as the 19,000 m2 Bitwy Warszawskiej and the 20,000 m2 Euro Polis Sienna Center.

The assets offer a combined usable space of around 125,000 m2 and are largely located in Warsaw’s Central Business District (CBD). The sale was structured as a share deal with the buyer taking control of the companies holding the assets including a debt facility of €73 mln.

AXA bought the stake from Europolis (now part of CA Immo) in March 2007 for as much as €145 mln. 'The sale price reflects in particular the limited marketability of minority shareholdings and the current occupancy rate of the properties,' the investment manager said.

According to CA Immo's CEO Bruno Ettenauer, the acquisition is 'a big first step in the effective utilisation of significant capital inflows from the company’s recent sales transactions'. 'The investment will consolidate our presence in prime areas of Warsaw while significantly raising our cash flow from investment properties over the long term. This transaction also enables us to acquire attractive core properties below present market values, which will have a suitably positive impact on CA Immo's NAV,' Ettenauer added.

SOUTHERN EUROPE
The P1 deal is the latest discounted transaction to be completed by AXA Immoselect in Europe. In December 2013, the fund offloaded three logistics properties in Spain at a discount of 21%. The properties were the 17,000 m2 Mas Blau II facility in El Prat de Liobregat, Barcelona; the 37,000 m2 Miralcampo II in Azuqueca de Henares near Madrid; and another 51,000 m2 property in Alcalà de Henares near Madrid. The three assets had an average vacancy rate of 23%.

Also in December, the fund signed the sale of five out of a total of six assets in Italy valued at some €350 mln. The fund manager had hired Cushman & Wakefield to divest the portfolio which encompasses 250,000 m2. AXA Immoselect sold the 26,000 m2 Nhow hotel at Via Tortona 35 in Milan, which is operated by Hauptmie with a contract running through 2021 and was last valued at €47 mln; the 103,000 m2 Tortona Logistic Centrum valued at €49 mln; a 41,000 m2 industrial asset at Via Canapi in Oleggio valued at €15 mln, as well as the 16,000 m2 La Scaglia in Civitavecchia worth some €24 mln and a 32,700 m2 office building at Viale Parco dei Medici in Rome, last valued at €91 mln. The transactions were completed at a 25% discount to the latest appraised market value.

Following the deal, the company still owns the 39,000 m2 Brebemi mall at Strada statale 11 in Bergamo, northern Italy, which was last valued at €108 mln. Similarly, in late 2013, AXA Immoselect divested the Perspective Defénse office scheme to the north of Paris for a bargain price of €126.5 mln. The figure represented a 21% discount to the asset's appraised market value per end-April 2013, and a discount of nearly 30% to the asset's value only a year before. AXA Immoselect had bought the asset in May 2008 from a joint venture of developer Altarea Cogedim and AXA for €170 mln.

Also in 2013, the fund sold a portfolio of Dutch secondary properties for €140 mln at a 40% discount to the most recent independent valuation.

In addtion, it divested the Grafenberger Höfe building in Dusseldorf for €30.5 mln, representing a 21% discount to the asset's most recent market value. The property was valued at €42.5 mln at end-April 2012.

Click on the attachment below for a list of AXA Immoselect's main properties earmarked for disposal.

DEAL FACTFILE P1 PORTFOLIO

BUYER: CA IMMO
VENDOR: AXA IMMOSELECT
ASSET: FIVE OFFICES IN WARSAW (P1 PORTFOLIO)
PRICE: €119 MLN
DISCOUNT: 18%
BROKER: C&W

By Virna Asara
Rome Correspondent