Schroder European Real Estate Investment Trust Plc (SERE), the company investing in European growth cities, is pleased to announce it has completed the purchase of a multi-tenanted office property in Saint Cloud, Ile de France, Paris, for approximately €30m.
Strategic value-add acquisition alongside Grand Paris extension - attractive yield, multi-tenanted, with income growth potential-
This is the eighth acquisition by SERE, which has now invested €185m at a blended net initial yield of approximately 6.3%, in selected liquid and established Western European growth cities.
Fully let to 12 tenants, the c. 15,800m² office building represents the best office space within the larger 65,000m² complex, benefiting from good natural light, divisible floor plates and attractive views over Paris. The current average WAULT is 5 years, with annual lease indexation and affordable rents. The strategic plan for the asset is to maximise income returns, stabilise the existing rent roll and grow rents over time. With an established presence in the Paris market, Schroder REIM is well positioned to add value to the investment.
The new Grand Paris public transport connection will be completed alongside the building in 2025, which is expected to provide significantly improved accessibility to this part of Paris. Saint Cloud is a mixed use office and residential area that already benefits from good transport connectivity, being in close proximity to the Paris ring road and with nearby metro, train and tramway stations.
The acquisition is entirely consistent with the Company’s stated strategy of investing in growth cities benefiting from urbanisation, demographic change and infrastructure improvements.
Tony Smedley, SERE Fund Manager, commented: "This off-market acquisition, secured on favourable terms, further demonstrates our ability to identify assets that are accretive to the income profile of the Company, as well as the competitive advantages afforded to us through our well-established presence in the French real estate market. The purchase price represents a significant discount to replacement cost.”
“The Ile de France region is growing more quickly than the domestic market and has deep occupation and investment demand with liquid markets. We have a healthy pipeline of assets in growth cities across a number of Western European markets, with evidence suggesting these will become increasingly attractive real estate centres.”
“We continue to focus on fulfilling our growth ambitions and are confident of delivering on our stated IPO strategy.”
