Schroder European Real Estate (SERE) Investment Trust, a fund focusing on European growth cities, has secured a multi-tenanted office property in Sant Clound, Ile de France, n Paris for €30 mln.
The off-market deal for the value-add property represented a 9.5% yield.
'This off-market acquisition, secured on favourable terms, further demonstrates our ability to identify assets that are accretive to the income profile of the company, as well as the competitive advantages afforded to us through our well-established presence in the French real estate market,' commented Tony Smedley, SERE fund manager. 'The purchase price represents a significant discount to replacement cost.'
The 15,800 m2 office building, which is fully let to 12 tenants, is part of a larger 65,000 m2 complex. The current weighted annual unexpired lease term is five years. Schroder said that the plan for the asset was to maximise income returns, stablise the existing rent roll and grow rents over time.
This is the eighth acquisition by SERE, which has now invested €185 mln at a blended net initial yield of approximately 6.3% across Western Europe.
'The Ile de France region is growing more quickly than the domestic market and has deep occupation and investment demand with liquid markets. We have a healthy pipeline of assets in growth cities across a number of Western European markets, with evidence suggesting these will become increasingly attractive real estate centres,' added Smedley.
'We continue to focus on fulfilling our growth ambitions and are confident of delivering on our stated IPO strategy,' he concluded.
