Valad raises EUR 196m for French industrial fund

Sydney-based Valad Property Group has raised EUR 196mln in its first closing for its new EUR 500mln industrial fund in France, known as Parc d'Activités. Twelve international institutional investors have committed EUR 96mln, including EUR 5mln from Valad Property Group. In addition, Landesbanken Hessen-Thuringen-Girozentrale (Heleba) is providing a first tranche five-year debt facility of EUR 100mln. As such, the fund's gearing is not expected to exceed 65% loan-to-value.

Parc d’Activités will invest in multi-let industrial estates which are mainly located in Paris' Ile-de-France area. The fund has a target IIR of 12% over its ten-year life. 'We really look at properties that we can add value to in some way, which can involve refurbishing or even repositioning properties,' said Peter Hurley, executive director and chairman of Valad's European operations, who is based in London.

Earlier this month, Parc d'Activités acquired four industrial parks in Paris for EUR 102mln from Valad Continental Partners, a joint venture between Valad and HBOS. The properties were formerly managed by GViO, Valad's Paris-based business. To date, Valad has invested around EUR 735mln in 45 logistics estates in France, mainly in the Paris region.

However, industrial prices in France have shifted significantly in the past year, moving out by between 100 and 150 basis points, says Stephen Miles, a director of European capital markets at Jones Lang LaSalle, based in London. 'Yields are typically in the region of between 7.5% and 8% today but there is a lack of good stock in the Paris region,' he said.

Valad intends to hold a second closing within six weeks, said Hurley. 'Over the next eighteen months, we hope to raise an additional EUR 150mln in equity,' he said.

In the year to June, Valad Property Group raised around EUR 1bn, including debt, across six funds, including the Valad Opportunity Fund UK, which can invest opportunistically across all property sectors in the UK, and its Nordic Aktiv 2 Fund, which invests in value-added industrial and office properties in the Nordic region.

Valad, which offers a range of services, including fund management and investment banking, has around EUR 12bn of property assets under management, of which around half are in Europe and half in the Asia Pacific region.