FdR to launch OPCI vehicle, seals EUR 240m refinancing

French property group Fonciere des Regions (FdR) expects to receive approval from the French financial market authority by the end of the year for the creation of an OPCI (Organisme de placement collectif en immobilier) management company.

The Paris-based company said that the OPCI investment vehicle will be used to build partnerships with institutional investors. The company did not disclose the target size of the OPCI, which is a non-listed investment structure open to institutional and retail investors.

OPCI's were introduced in France last year to boost investment in the property sector. The structure has become increasingly popular among French investors over the past 12 months, mainly because its shares do not risk trading at a significant discount to Net Asset Value and as they merely reflect the underlying real estate portfolio.

Furthermore, FdR said that the redevelopment of its CB 21 flagship tower project at La Défense business district of Paris will be launched only after an agreement is reached with a tenant. The company is currently in an 'advanced stage' of negotiations with several potential tenants for the skyscraper, and hopes to seal an agreement in the first half of 2009.

The company, which bought the tower for EUR 486 mln from insurer Groupama in July 2007, said it has refinanced the existing debt of EUR 340 mln in the amount of EUR 240 mln, with the balance being financed by an equity contribution of EUR 100 mln. The short-term loan agreed with banks Calyon, HSBC and Natixis, has been extended for an additional 12 months.

FdR remains confident it would meet its 2008 targets of boosting cash flow per share and reducing its leverage. The company's disposal programme, which targets EUR 1.3 bn in sales for this year, will continue in 2009, the company said. The company has EUR 11 bn in property assets.