SIIC de Paris, the French property arm of Spanish group Realia, said on Thursday that it is 'in exclusive negotiations' with Société Foncière Lyonnaise (SFL) to sell a 30% stake in the company before the end of the year. As part of the operation, Inmobiliaria Colonial's French subsidiary SFL plans to swap two office towers worth some EUR 286 mln for a minority interest in SIIC de Paris. The operation is aimed at lowering the stake held by majority shareholder Realia in SIIC de Paris to the 60% threshold envisioned for French real estate investment trusts.
SIIC de Paris, the French property arm of Spanish group Realia, said on Thursday that it is 'in exclusive negotiations' with Société Foncière Lyonnaise (SFL) to sell a 30% stake in the company before the end of the year. As part of the operation, Inmobiliaria Colonial's French subsidiary SFL plans to swap two office towers worth some EUR 286 mln for a minority interest in SIIC de Paris. The operation is aimed at lowering the stake held by majority shareholder Realia in SIIC de Paris to the 60% threshold envisioned for French real estate investment trusts.
The agreement also envisages the signing of a shareholder accord between Realia and SFL which will grant them control of SIIC de Paris. The properties being sold to SIIC de Paris consist of two buildings offering 48,000 of space at the Parisian business district of La Defense.
'The operation allows SFL to secure a minority but significative holding in the capital of SIIC de Paris which owns a portfolio of high-quality assets in Paris and its business district,' SFL said in a statement.
As a result of the transaction, SIIC de Paris will increase the office share of its portfolio and decrease its Loan-to-Value ratio, it said. The completion of the deal before year-end will also allow it to retain SIIC status, after France updated the SIIC regime in 2007 to include a 60% shareholding limit.
Majority owners in a total of five French SIICS are required to sell shares before the end of the year to avoid the companies' losing their tax-transparent status. Aside from SIIC de Paris, they are Fonciere Massena, Tesfran, Docks Lyonnais and MB Retail Europe. All have yet to comply with the regulation.