The KanAm grundinvest Fonds has managed to secure contracts on the portfolio sale of five office buildings in Paris, Luxembourg and the Netherlands. Ownership will transfer in September, at which point the gross purchase price of over €875m will be due. Until then, the city of Paris, where three of the buildings are located, and others will retain rights of first refusal. With this portfolio sale, the fund management has taken another essential step towards reaching its goal of liquidating the fund. In accordance with German regulations, the fund management will be transferred to Depotbank Warburg on 31 December 2016. Sales contracts for three further properties have already been largely negotiated, parts of the diminishing residual portfolio of the then remaining 11 properties or real estate companies are still being actively marketed.
The buyer is a fund managed by the French Asset Manager Amundi Real Estate, a subsidiary of Amundi Group. With AUM of close to €1,000bn worldwide (as of 31 March 2016), Amundi is the No. 1 European Asset Manager and in the Top 10 worldwide.
The properties which have now been sold include 53 Quai dÓrsay, Tour Egée and Le Stadium in Paris, Espace Petrusse in Luxembourg as well as PwC Toren in Rotterdam in the Netherlands. Separate sales contracts have been agreed for each object under the legal framework of the respective country of domicile, with an overarching frame contract signed for the entire transaction. Before they were marketed, all the properties had undergone an improvement programme within the framework of the AGENDA 2016 liquidation strategy, which means they were let and/or renovated and/or extended.
The individual buildings are:
QUAI D’ORSAY, Paris, France
After extensive modernisation work, KanAm Grund Asset Management relet this Art Deco building located near the banks of the river Seine in its entirety to the renowned French law firm Bredin Prat under a long-term tenancy agreement. Comprising approximately 9,000m² of leased office space plus underground parking facilities, this was one of the largest transactions on the Paris rental market in the first quarter of 2015. After the previous tenant had terminated the contract prematurely, KanAm Grund REAM upgraded this property to certified environmentally friendly standards with double-glazed windows, individual climate control for each office, lighting sensors and sustainable materials. This Art Deco office building was acquired by the KanAm grundinvest Fonds in June 2003.
Tour Egée, Paris La Défense, France
Following months of negotiations, KanAm Grund Asset Management let a total of more than 20,000 square metres in the Paris Tour Egée to the French catering service provider Elior Group for their new headquarters and showroom. This includes the entire office space in the “batterie haute” (levels 24-39 of the high-rise building), office and archive space on the second floor of the semi-basement and 320 parking spaces in the Tour Egée's own car park. Elior, who are moving their headquarters into the Tour Egée and will also use the high-rise building in the modern La Defense district as a showroom to stage their service capabilities, will also renovate and operate the restaurant and service areas of the Tour Egée. The tenancy agreement will run until 2025. This striking high-rise building was acquired by the KanAm grundinvest Fonds in June 2004.
Le Stadium, Paris Saint-Denis, France
This office building, comprising 21,466m² of leased office space plus 624 car parks, is located in a prominent corner position of the northern Saint-Denis market section. Here, KanAm Grund Asset Management was able to relet returned space without vacant periods. The excellent tenant retention is reflected in tenancy contract extensions, some of which even included the addition of extra space. In terms of technical improvements to this building, the electric motors of all air conditioning systems in the tenancy space have been replaced successively and safety-relevant norms have been implemented by such measures as the installation of new anti-fall guards on the roof. Le Stadium was purchased in October 2005.
Espace Petrusse, Luxembourg
This modern office building, comprising more than 20,000m², formed part of a larger development project, which also included two hotels and some premium apartments. The property is under lease to the Arcelor Mittal Group housing their headquarters until 2020. In cooperation with the tenants and the technical building administration, it has been possible to reduce the energy consumption of this building by 30%. Simultaneously, there have been investigations into and preparations for the possiblity of a future use of this property by two or more tenants. Espace Petrusse was purchased in December 2008.
PwC Toren, Rotterdam, Netherlands
This office building in the Dutch port city of Rotterdam offers more than 19,000m² of lettable space. The tenancy agreement for over 80% of this building with the auditing company PwC (PricewaterhouseCoopers B.V.) lasts until the year 2025. The remaining space has been prepared for smaller tenancies, in order to transition the building from a one tenant to a multi tenant building. PwC Toren was acquired by the fund in April 2005.
With AGENDA 2016, KanAm Grund Group developed and published a clear and transparent strategy for the liquidation of the KanAm grundinvest Fonds at the very beginning of the liquidation period 4 years ago. The most important aim of this strategy has been and remains the best possible marketing of the fund's real estate holdings. In line with this aim, some of the over 50 original properties require extensive renewed and/or new tenancy agreements, plus renovations as well as refurbishments, in order to move them into the trading portfolio and enable them to be marketed more effectively - as this has been the case with the portfolio that has now been sold. A further aim, the repayment of all debt of the fund, has long been achieved. Since the beginning of the liquidation of the KanAm grundinvest Fonds, payouts of nine dividends have so far seen the repayment of €1.3bn to investors. The next dividend payout is planned for the fourth quarter of 2016.
