Leading Cities Invest (LCI) has started the year by investing in a very profitable property in the Greater Paris area. Le Copernic, with its 11,000 m² in the Paris metropolitan region, was acquired as the tenth fund property in this area. The tenant is Dassault Systèmes, a subsidiary of Dassault Aviation, the global market leader for luxury business aircraft.
With 3.1%, Leading Cities Invest also managed to achieve its performance target in the third full business year for its investors who, if they have invested since July 2013, stand to enjoy an investment success of 9.8%. The fund has invested in the five locations of Hamburg, Paris, Brussels, Frankfurt am Main and Munich. Due to on-going acquisition negotiations, the fund management announced a further CashCall for the coming weeks.
The new property is located in Paris, a metropolitan region with a population exceeding 12 million which, thanks to its exceptionally strong economic concentration, is responsible for generating around one third of France's gross domestic product. The tenant Dassault Systèmes is globally renowned for 3D design software for the automotive and aerospace industries, transport and retail and product lifestyle management solutions. The term of the lease runs until the end of 2024.
Portfolio KPIs at Leading Cities Invest continue to exhibit unchanged high quality. Properties are almost complete leased, with the occupancy rate at 99%. Around 90% of the rental income is secured into the year 2020. The average term of these leases is about 6.6 years. The fund is also distinguished by its exceptional real estate portfolio which currently generates around 47% of rental income from retail and hotel rental space and medical practices. The proportion of rental income from office premises has risen to around 53% through the acquisition in Munich and now in France. This means that the fund continues to differentiate itself strikingly from competitive products with a clear surplus of office real estate.
LCI is leveraging the potential offered by major cities. The fund management faces the high level of competition for quality real estate evident in this economic environment through prudent and selective acquisitions of smaller properties in attractive locations. Suitable investment properties have successfully passed through the research and portfolio models developed by KanAm Grund – the C-SCORE MODEL for selection of suitable leading cities as investment locations, and the Property Selection Model (PSM) which determines the best property investments. This data and fact-driven property selection process allowsLeading Cities Invest to maximize potential returns. As a new-generation open-end real estate fund, LCI is resilient for the first time against unforeseeable unit redemptions and offers greater security and the same rights to all investors.
