Pramerica buys two office developments in Paris

Prudential Financial's real estate investment management arm Pramerica has bought two office developments in the Paris region from the Lazard Group for an undisclosed amount.

Pramerica acquired the Avancee development in Creteil, southeast of Paris, at the entrance of the business park 'Europarc'. The project comprises two office buildings with a total surface area of 11,890 m² and 338 parking spaces.

The second development, called Tryalis, is located in the eastern suburbs of Paris, in the city of Montreuil, and consists of 5,438 m² of office space and 114 parking spaces. Both developments are scheduled for completion in 2009. Pramerica was advised by Savills, with Allez & associes acting as legal representatives. The Lazard Group was advised by Lotz legal team.

'The prime locations and the healthy lettings market in the Paris region are the main key success factors of these two transactions. The forward purchase practice of non pre-let buildings does present some risk, although a 12-month rental guarantee is normally provided by the developer. To minimise this risk the right location is extremely important. In this instance, we believe that after letting and dependent on leases and covenants, our client can achieve between 75 and 100 bps of yield compression', said Nicola Ciavarella of Savills' Paris office.