Private equity investor EQT has made its first real estate acquisition, an office refurbishment project on Rue Lauriston in Paris.
The 5,700 m² purchase, made through a joint venture with STAM Europe, cost €33 mln. The vendor is a private investor.
The property currently comprises two adjacent buildings with a permit to convert both the private mansion and parking garage into a 5,700 m² office scheme. Located in the 16th Arrondissement of Paris, close to the Arc de Triomphe, it benefits from excellent access to public transportation.
Robert Rackind and Edouard Fernandez, partners and Real Estate co-heads at Investment Advisor EQT Partners, commented: ‘EQT Real Estate locates opportunities in European gateway cities benefiting from tight supply and solid occupier demand. With the investment in Paris CBD, EQT looks forward to creating value through optimizing the current site and developing a benchmark office property, offering quality, modern space to office tenants.’
A close source said that EQT Real Estate is pursuing a ‘build to core’ strategy across Europe, with a focus on offices as the most liquid market segment, targeting 16-20% gross levered IRRs. The same source said that EQT expects property yields to bottom out, shifting value creation to rental growth.
EQT is planning the creation of further prime contemporary offices in conjunction with STAM Europe.
‘This will be a great partnership for STAM Europe on Rue Lauriston, as EQT is a firm representing growth and development. Both our groups have substantial experience in high profile value-add projects of this nature. With our local foot print and the EQT real estate team’s pan-European focus, we will be able to transform this asset into a landmark office building,’ commented Edward Bates, Managing Director at STAM Europe.
Law firm Ashurst and notary Thierry Vachon acted as advisors to EQT and STAM Europe. Financing was provided by Aareal Bank.
