Cordea Savills buys in Paris

The tenant base provides diversification with six national and international tenants with strong covenants, such as Nespresso and the government. The net initial yield is 5.3%.

Overlooking Opera Garnier on the corner of Rue Scribe and Rue Auber, the asset is in a sought-after area close to international corporations and financial companies. It is also part of a popular shopping area with a high concentration of department stores offering mass market and luxury brands.

With recent additional equity commitments from German institutional investors, the European Commercial Fund is targeting a further €100 million of acquisitions by the end of the year and more investments are envisaged for 2011.

Thomas Guetle, Director of Institutional Business at Cordea Savills, commented: “The fact that we continue to raise equity for our European Fund confirms not only our strategy to focus on the core markets in Western Europe but demonstrates also the trust and alignment of interest investors have with our fund and investment team.”

Gerhard Lehner, Director of Investment at Cordea Savills, adds: “The acquisition in Paris was a rare opportunity to add an attractively priced trophy building in a prime area of a major European capital to the portfolio of the European Commercial Fund. Providing exposure to the retail sector also enhances the diversification profile of the fund. Our focus for future acquisitions is on well-located properties in prime office markets and modern, dominant retail properties with strong anchor tenants and good transportation links”.

The European Commercial Fund offers institutional investors low risk investment in commercial property in the largest economies in the EU. Target markets are France, UK, Nordics, Benelux, Italy, Spain and Germany. The Fund has an income focus and targets stable annual distributions of at least 5% and a net total return of at least 7% p.a., after fees and taxes.

GLL was advised by Gide. The transaction was completed by Colliers UFG PM (Investment Department) with an exclusive sale mandate.

Cordea Savills was advised by Freshfields Bruckhaus Deringer LLP and Maître Le Falher (Etude Le Breton & Associés).

Source: Cordea Savills