French REIT Gecina, which focuses primarily on offices in Paris, dominates the ranking of Top-10 deals for its domestic market during the first half of 2015.
French REIT Gecina, which focuses primarily on offices in Paris, dominates the ranking of Top-10 deals for its domestic market during the first half of 2015.
French commercial real estate is not about Paris offices alone, but the top 10 deals for the period illustrate how a host of investors are seeking to access the office market in the capital both directly and through vehicles such as Gecina.
Gecina claimed the largest French transaction by volume in H1 when it acquired two major office tower schemes in Paris for €1.2 bn from Ivanhoé Cambridge.
The transaction added 122,200 m2 of office space to Gecina’s portfolio. The largest portion was the 88,600 m2 T1 & B tower in the La Défense business district, which houses the global headquarters of Engie Group, formerly GDF Suez. The remainder was made up by a 33,600 m2 office complex at 75 Avenue de la Grande Armée in the central business district of Paris. The property is the French headquarters of consultancy group PSA.
Gecina chalked up two other office transactions totalling €324 mln, one in Paris and one in Lyon, during the period under review.
The Paris-listed company has long been a strong player, even when it was the slightly overshadowed French outpost of Metrovacesa, the Spanish developer-investor with pan-European ambitions prior to the global financial crisis.
New shareholders
Post-GFC, Metrovacesa has been forced to temper its ambitions while Gecina is increasingly basking in the attention of the international investor community. Last year Metrovacesa sold its majority stake in Gecina in a €1.5 bn deal. The new cornerstone investors are a veritable Who's Who of prominent investors: Norway's Government Pension Fund Global, France’s Credit Agricole Assurances, US private equity giant Blackstone and Canada's Ivanhoé Cambridge.
Ivanhoé Cambridge is the property arm of Canadian institutional investor Caisse de dépôt et placement du Québec. Like its fellow investors in Gecina, the Canadian firm is seeking to benefit from forecast rental growth in the Paris office sector.
Ivanhoé Cambridge is also reshaping its own international direct property holdings. A significant part of this strategy was the agreement to sell the two-office portfolio to Gecina.
As part of the agreement, Ivanhoé Cambridge increased its stake in Gecina from 21% to 23%. Ivanhoé Cambridge's interest in Gecina is held in concert with US private equity group Blackstone, and the two partners together hold just under the 30% required by law to launch a full bid.
'The increase of our economic participation in the investment with Blackstone to 23% of Gecina’s share capital, combined with the sale of our assets to Gecina, demonstrates our support for the strategy of this leader in the office building sector in the Paris region,' commented Daniel Fournier, CEO of Ivanhoé Cambridge.
Gecina now has some €11 bn of assets under management and has continued to trade assets in July 2015. In the latest deal it has added a €155 mln office redevelopment project near Gare du Nord in northern Paris and sold an office building at the edge of the city for €84 mln.
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TOP 10 DEALS IN FRANCE
H1 2015
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1. Ivanhoé sells €1.2b of Paris offices to Gecina, raises stake
2. Abu Dhabi SWF bags Paris office project for €477m
3. Constellation closes €330m purchase of iconic Paris hotel
4. Allianz to acquire Nice mall from Unibail-Rodamco at 5% yield (deal closed in 2015)
5. Invesco confirms €220m purchase of Canal+ HQ near Paris
6. Altarea-Cogedim buys out 50% Orion fund share of €400m mall
7. Chuc Hoang buys Paris' Nikko hotel for €200m
8. Gecina acquires CityLights for €188m
9. Gecina buys Lyon office property
10. DeAWM sells Oxygene building in Paris for €93m
* preliminary data compiled by PropertyEU Research on reported investment activity from 1 January to 30 June 2015
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COMMENT
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