Morley, DTZ regional fund completes first acquisition

UK asset manager Morley and DTZ Asset Management have completed the first acquisition for their French Regional Property Fund, Hexagone. The new investment vehicle has acquired Sapphire, a portfolio of six French regional properties for EUR 84mln from a private fund. At the same time, the fund has been approved by the Luxembourg supervisory authority CSSF.

The portfolio includes six high-quality property assets totalling 41,900 m2, all with high occupancy levels. Offices make up 71% of the portfolio, while light industrial accounts for around 19% and warehouse space for another 10%. Two of the assets are located in Lyon-St Pries and Lyon-Limonest, while the remaining four are situated in the second ring around Paris in Elancourt, Eragny-sur-Oise, Lisses, and Combs-la-Ville.

Morley's Andreas von Gossler, Hexagone's fund manager, said: 'This very attractive seed portfolio evidences Morley's and DTZ's ability to secure high-quality assets with attractive income yields and provides further clarity to investors on the launch of our fund.’

'Despite having been executed in volatile market conditions and financing uncertainty, this first transaction for the fund evidences the sustainability of our strategy to invest in the French regions that offer stability in terms of pricing and lease terms,' said Patrice Genre, managing director and founder of DTZ Asset Management.

The vendor was advised by King Sturge, SCP Theret Leroy Reberat Brandon Ladegaillerie. DTZ Asset Management and Morley were advised by Paul Hastings, Paris, Etude Allez & Associés and Moisan Boutin. The fund targets an internal rate of return of 10% per annum over its 10-year life span and a net distribution yield of between 5 and 6% per annum when fully invested.