Tour Eiffel buys spec development near Paris

French REIT Societe de la Tour Eiffel (STE) said on Tuesday that it has committed to the acquisition of a speculative office development project in the southern Parisian district of Montrouge from construction conglomerate Vinci Construction group for EUR 25 mln.

The transaction, which marks the return of the French REIT to the acquisition trail, is in line with its strategy to focus on the acquisition of green suburban offices properties.

'This move up the risk curve reflects the growing need for new office space,' the company said, adding that its core portfolio has reported 'an encouraging level of leasing activity' so far this year. 'Undersupply is widely anticipated for this sector in the medium term,' said Robert Waterland, managing director of STE.

The project is located opposite Evergreen, the new campus style headquarters of Crédit Agricole, and will offer 5,000 m² of office accommodation. The expected return on the operation is 7.5% upon, STE said. Delivery is scheduled for the first quarter of 2013.

'The company continues to rejuvenate its portfolio, whose vast majority (62%) consists of new buildings or assets with less than 10 years,' said Waterland. 'We aim to increase our presence in the Paris region with modern green office buildings which increasingly represent the bulk of our portfolio.'