France's FdR to scale down logistics business

Foncière des Régions plans to sell the bulk of its logistics assets over the next 2-3 years as part of a strategic reorientation.

The French REIT aims to dispose of around €500 mln of logistics assets after delisting its logistics property unit Foncière Europe Logistique in 2012.

Philippe Le Trung, the group’s head of investor relations, told PropertyEU that the disposals, to be carried out over the next two to three years, are part of the group’s strategy to ‘progressively’ scale down the logistics activities.

‘We have already carried out around €220 mln of sales over the past 12 months and we will sell another €500 mln of assets,’ Le Trung added. FdR owned around €930 mln of logistics assets at year-end 2012.

Last year the Paris-headquartered company took control of its logistics arm with the acquisition of Sophia GE's 9.7% stake in the company for €3 per share, representing a total investment of €33.5 mln. The deal allowed FdR to delist the shares of the logistics unit and take the company private.

According to Le Trung, the French REIT will be looking to retain only three logistics assets, Garonor, Pantin and Cap18. Together, they represent a combined value of around €400 mln. ‘These are all assets where we expect to continue to see an increase in value,’ Le Trung pointed out.

The progressive wind-down of the logistics activities is part of a new strategy launched by the FdR group in 2010 focused on deleveraging, simplifying the business and strengthening cooperation with its key tenants. Le Trung said that all of these targets were achieved by the end of 2012, paving the way for a new phase in the company’s development. ‘2013 will be a transitional year for FdR,’ Le Trung said. The company has reduced its loan-to-value from 60% to 45% over the past three years.