Meyer Bergman, Thor Equities buy big on Champs-Elysées

European retail property specialist Meyer Bergman has teamed up again with New York-based developer-investor Thor Equities to buy a mixed-use building on Paris’ Avenue des Champs-Elysées.

The investment volume for the asset located on what the buyers' describe as a 'luxury brand hot spot' comes to around €250 mln.

This is the second time that Thor and Meyer Bergman have joined forces. In 2010 they partnered on the purchase of London's Burlington Arcade shopping centre.

Their latest joint acquisition is a 10,200 m2 Haussmann building at 65-67 Avenue des Champs-Elysées. The property is fully leased, with the street-facing retail units occupied by Nike and Tommy Hilfiger.

While the stores are the main value drivers of the property, its upper levels comprise offices and high-end residential units to the rear. The building has retained its historic stone facade and features two interior courtyards.

Meyer Bergman and Thor Equities said that the Champs-Elysées is a prime retail location that has sustained strong international retailer demand because of Paris's historic lead as a creative hub for global fashion. The Champs-Elysées benefited from the openings of Marks & Spencer, Abercrombie & Fitch, and Banana Republic in 2011 and has remained in the spotlight in 2012 with the opening of Levi Strauss, Kusmi Tea, and the refurbishment of Hugo Boss flagship stores. Other brands, including Apple, are looking for space on the Champs-Elysées.

Markus Meijer, Meyer Bergman’s CEO, said: 'This gem of a property is located in one of the most visited retail destinations globally and our tenants count premium and luxury brands, notably Louis Vuitton, as their neighbours. This and a number of our recent transactions highlight our current focus on defensive high street locations in key European cities. We see great potential in this mixed-use asset that not only offers steady income but also attractive upside potential through our asset management initiatives.'

The joint venture that purchased the renovated building in an off-market transaction is majority-owned by Meyer Bergman’s second value-add fund, Meyer Bergman European Retail Partners II (MBERP II). The fund passed the halfway stage in raising €500 mln of equity in October and its roster of investors includes Canadian and Nordic pension funds, US endowments and funds of funds.

MBERP II targets properties with a dominant market position or in prime locations. This has translated into the acquisition of Whiteleys Shopping Centre in London's Bayswater district, stores on the premier shopping destinations of Copenhagen and Madrid, and the Westfield Broadway shopping centre development in Bradford, northern England.