Hermes makes major French sale-and-leaseback deal (FR)

Hermes Real Estate Investment Management Limited (HREIML) has acquired a 75% interest in a diversified sale and leaseback portfolio of French wholesale stores from METRO Cash and Carry France (MCCF) as a part of a strategy to diversify and expand its portfolio internationally.

The portfolio consists of 43 core, well-maintained wholesale stores strategically spread evenly around France, representing approximately 50% of the French store network. The investment vehicle gives HREIML control provisions over both the exit and the approval and execution of the business plan. Amundi Real Estate are the vehicle’s regulatory fund manager. The investment reflects a total equity commitment of low three-digit million range. The daily business of METRO Cash & Carry is not affected by the transaction. The French subsidiary of METRO Cash & Carry leased back the wholesale stores under long-term lease agreements.

Chris Taylor, Chief Executive of Hermes Real Estate Investment Management Limited said: “We are delighted to have secured this portfolio of well-located properties leased to one of Europe's top retailers at a time in the cycle when few other investors are active, yet in a market where planning is restrictive and supply constrained. We believe the underlying property fundamentals from this portfolio will deliver attractive returns over the long run.”

Jürgen Schwarze, CFO of METRO PROPERTIES concluded: “After having done an identical transaction already in 2012, we are now happy for having gained Hermes as the main investor in our second French fund. Whilst through this real estate structure Hermes will indirectly participate in METRO Cash & Carry’s outstanding operational business, METRO will in turn benefit from Hermes being one of the most experienced experts in the retail real estate sector.”

Wolfgang Baumgartinger, Head of Corporate Transactions METRO PROPERTIES added: “The experience of our efficient expert team, which has previously closed three sizeable closed-ended fund transactions during 2010 and 2012 was extremely helpful. Together with our advisors, we were able to create and market this quality investment product successfully and within minimum time.”

JLL acted for HREIML, Societe Generale Corporate and Investment Banking acted as exclusive placement agent and debt financial advisor to METRO PROPERTIES. Amundi Real Estate, the Amundi subsidiary for real estate fund and asset management, is the regulatory fund manager.

Source: Hermes Real Estate

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