Acquisition of Paris Investment Property
Hammerson PLC
6 March 2000
Hammerson - Acquisition of Paris Investment Property
Hammerson plc has exchanged contracts to acquire SCIPAR Madeleine, a French
company which owns Les Trois Quartiers, 21 boulevard de la Madeleine, Paris
1er, a 28,500 sq m freehold mixed use offices and retail property. The
acquisition price is £122 million (FF1.3 billion), which will be financed from
Hammerson's existing resources. The initial yield is 5.75%. SCIPAR Madeleine
has tax losses which should be available to Hammerson France.
Constructed in 1991, the property occupies a prominent site at the junction of
boulevard de la Madeleine and place de la Madeleine at the heart of the prime
business district in Paris. The area attracts large numbers of tourists and
shoppers and is rapidly improving as a retail location. The building has
three levels of basement car parking, providing 194 spaces, and is extremely
well served by public transport including a direct link to the Madeleine metro
station.
The 17,300 sq m of office space, on second to seventh floors, is leased to 14
tenants, the three largest of which are Barclays Bank, ING Bank and Robeco,
and which occupy a total of 8,200 sq m. The offices generate total rents of
£4.5 million (FF48.3 million) and the rent roll is reversionary by
approximately 10%.
The 11,200 sq m of retail space (on the ground, first and basement floors) is
occupied by 19 tenants and generates an annual rent roll of approximately £2.8
million (FF29.5). The principal tenants are Madelios, an established, high
quality menswear business and Decathlon, the sports goods chain, which occupy
4,800 sq m and 4,200 sq m respectively. Both these leases are reversionary
and the Decathlon lease contains a provision for an additional payment based
on turnover.
Commenting on the transaction, John Richards, Chief Executive, said:
'This acquisition is in line with our strategy of securing additional
investment properties in continental Europe. Following the acquisition,
the French portfolio will account for approximately 25% of the group
total.
Les Trois Quartiers is a well located investment property where the
majority of existing leases are already reversionary in an area where
office and retail rents are continuing to grow. Prospects for the Paris
property investment market remain good with continuing strong demand
both from French and international investors.'
Hammerson was advised by The Retail Consulting Group and FPD Savills, whilst
the vendors were advised by Jones Lang LaSalle.
For further information:
John Richards Tel: 0207 887 1000
Chief Executive Fax: 0207 887 1010
Hammerson plc
Chris Smith Tel: 0207 887 1000
Director of Corporate Affairs Fax: 0207 887 1010
Hammerson plc
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