MGPA, a private equity real estate investment advisory company, has completed the acquisition of a 29,700-m² office and retail landmark building known as Les Trois Quartiers, located in Boulevard de la Madeleine in Paris CBD, for 210 million (net) from Hammerson Plc ("Hammerson"). The asset generates a passing rent of 19.8 million.
The 29,700-m² office and retail landmark building known as Les Trois Quartiers in Paris.
Of the purchase price, 140 million has been funded by third party debt and 30 million through a vendor loan from Hammerson. At December 31, 2008, the property was valued at 275 million (£266 million).
The acquisition is funded by MGPA Europe Fund III, part of the larger MGPA Global Fund III, which closed in June 2008 with commitments of US $5.2 billion. MGPA Europe Fund III raised US $1.3 billion (841.5 million) and has already made investments in Italy, Greece and Poland, but remains largely uninvested.
Les Trois Quartiers is a 29,700-m² seven floor mixed-use building constructed in 1932 and redeveloped in 1991. The building is multi-let with 40% retail, 60% office space and 192 parking spaces. It is in a prime location in the center of Paris and part of a major retail precinct. Les Trois Quartiers is well served by public transport with direct access to the metro from inside the building. It also has high visibility with 65 meters of facade on Boulevard de la Madeleine, a major artery in central Paris. The property has historically enjoyed a high level of occupancy and is currently 96% let.
MGPA's Chief Executive for Europe Alex Jeffrey said, "France is a key market for MGPA Europe Fund III. We are positive about the long term prospects for the Paris market especially relative to other core real estate markets in Europe. Paris offers a degree of resilience in the downturn due to the broad base of its economy. This was demonstrated by our recent successful leasing of Le Balthazar in Saint Denis to France Telecom."
MGPA's Investment Director for France, Olivier Vellay said, "The acquisition of this landmark property is MGPA's fourth investment in France. As for all its investments, MGPA will actively manage the property to bring it to its full potential and to institutional standards. We are looking forward to doing so in close partnership with the existing occupiers."
John Richards, Chief Executive of Hammerson, said: "We are pleased to announce the disposal of Les Trois Quartiers. This sale, in conjunction with the previous disposal of Forum Steglitz, will strengthen our balance sheet."
Hammerson plc is a FTSE-100 Real Estate Investment Trust which operates principally in the retail sector in the UK and France. At 31 December 2008, its £6.5 billion portfolio provided 1.4 million m² of retail space, including 15 major shopping centers and 19 retail parks, and 255,000 m² of offices.
Westdeutsche Immobilienbank AG acted as agent, Landesbank Hessen-Thüringen-Girozentrale and Deutsche Postbank AG financed the acquisition through a four-year mortgage of 140 million.
MGPA was advised by lawyers Gide Loyrette Nouel, with technical due diligence supp