Robert Waterland, Société de la Tour Eiffel

Société de la Tour Eiffel was one of the first SIICs (Société d’Investissement Immobilier Cotée) to be established following the French government’s introduction of their version of REIT legislation at the end of 2003. The company’s portfolio currently stands close to €1 billion of assets spread evenly between the Paris area and the regions. Real Estate Publishers' Ilona Klevansky Taillade caught up with Robert Waterland, Managing Director, to discuss the outlook for the company and trends in the market.

An independent, France-focused business

“Mark (Inch, President) and I are two experienced Anglo-Saxon property entrepreneurs with a very pragmatic approach. We’re non-political and transparent. We’re highly accepted in the French business community, but we’re not part of the establishment – that’s not been our profile, partly by design and partly by accident.

“Our focus is on France for two reasons. Firstly, the SIIC regime is fiscally more efficient for domestic activity, secondly having been around a long time, we’re very comfortable operating in the market that we know, one where we have status and a network. That is particularly comforting to us as substantial shareholders in the company.

“The company began very successfully with our focus on high yielding modern offices and a capital structure with a wide free float. The period since the crisis has been more difficult, particularly without a major shareholder to support us. We’re now consequently reviewing our vision of how the SIIC industry will move forward.


“The quoted sector is going through some upheaval at the moment. Until recently, our expectation was that the SIIC industry would evolve as it has in the States, where it is very mature. One of the characteristics in the States has been the tendency towards specialization by sector, be it healthcare, retail, mid-town offices, etc. This has been less apparent in Europe.

“We specialize in peri-urban offices and business parks, that’s to say suburban, but modern offices and business parks. We don’t say that we’re ‘anti La Défense’, but we see ourselves as an alternative. Our rents and service charges are much lower and the buildings are mainly horizontal and set out in a campus style, which can be built in phases.

“We see reduced demand for tower buildings in the future, and there are socio-environmental reasons behind this – the current generation of managers prefer working in horizontal as compared to vertical buildings, and there is a perception that campus sites are greener. The French market in particular has seen a notable amount of demand in recent months for turn-key developments of this type. It’s all about having modern space that is inexpensive and efficient.

Consolidation in the market

“What we’ve seen in the last six months is accelerated consolidation in the SIIC sector, but not for the reasons anticipated. There are very few business cases for consolidation, instead the trend is being driven by large institutional shareholders who have financial problems and so are disposing of their companies to make up shortfalls elsewhere.

“We are one of the few independent companies still standing alone – we’ve had a number of approaches, but we are proud of our independence. On the other hand we can’t totally buck the trend so will need to monitor what happens here. One of the issues is that we set up our company as 65% leverage and 35% equity, which is unacceptable today, though perceived as smart only a few years ago!”

“One thing that is certain is that the property industry needs more equity. We know there’s a lot of capital out there – particularly seeing the deals that have been announced recently. What is interesting is the diversifying origin of investment flows. There’s been an influx of new international money across the board in addition to domestic funds which are also increasingly active.”

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