CAAM RE, the property management arm of French bank Credit Agricole, is planning to expand its indirect property fund business as it sees 'fantastic' potential in the new OPCI investment vehicles introduced in France 18 months ago.

CAAM RE, the property management arm of French bank Credit Agricole, is planning to expand its indirect property fund business as it sees 'fantastic' potential in the new OPCI investment vehicles introduced in France 18 months ago.

Nicolas Simon, the newly appointed Chief Executive of the group, told PropertyEU in an interview during the MIPIM trade fair in Cannes that the company is studying the launch of a pan-European value added fund aimed at taking advantage of the sharp price correction across Europe's main markets. The fund - CAAM RE's first European vehicle - will be investing in France, Italy, UK, and Germany and will target a size of EUR 1 bn, including leverage of around 50%-60%.

'We expect the fund will be ready to invest by year-end or early next year,' Simon said. 'The yield correction has been so strong over the past months and we believe that most of the yield shift has already taken place, so this is a good moment for us to enter the market, which we believe will reach the bottom in the second half of this year.' Simon added that the vehicle will be open to French and international institutional investors.

CAAM, which has EUR 4 bn of real estate assets under management, also has plans to take advantage of a trend by corporates to spin off their properties, Simon noted. 'We are boosting our services and partnerships with corporates because corporate spin-offs are an ongoing trend in France which has been accelerated by the credit crisis.'

While corporates are striving for equity, institutional investors are eager for exposure to real estate and stable cash flow which helps them meet their liabilities. 'OPCIs are a great way to meet investor demand, they were the missing stone in the French investment market,' Simon concluded.

CAAM RE is currently discussing property mandates with several French groups, including a hotel company, retailers and nursing home operators.

Read more about CAAM RE's strategy and future plans in the April issue of PropertyEU magazine..