Completion of New Lettings in Paris
21 September 2017
SCHRODER EUROPEAN REIT COMPLETES NEW LETTINGS IN PARIS
Schroder European Real Estate Investment Trust Plc ("SEREIT" or the "Company"), the company investing in European growth cities, announces that it has agreed two new lettings, and is in negotiation to secure a new tenant, collectively accounting for c. 4,500 sqm of space, at its Saint Cloud asset in Ile de France, Western Paris.
· A lease extension and 555 sqm expansion with Outscale, the cloud operating system company, taking its total occupancy at the asset to 1,695 sqm secured;
· A new six year lease agreement with Ethypharm, a pharmaceutical company, for 2,450 sqm; and
· Ongoing discussions for a new 12 year lease with a governmental body, for ca. 400 sqm of vacant storage accommodation.
Following these new lease agreements the asset will be fully let, increasing the WAULT from 4.7 to 5.9 years[1] and improving income returns and revenue security, a key reflection of the asset's dominant position in a fast growing suburb of Paris. The Company recently implemented a value-enhancing refurbishment programme, comprising the full renovation of lift lobbies, with completion due in the second half of 2018.
Acquired in February for €30 million, the c. 15,800 sqm office building is valued at €33.1 million (as at 30 June 2017), a 10% increase relative to purchase price. The property will be next valued at 30 September 2017. The property exhibits all those characteristics sought by SEREIT in its assets including good natural light, divisible floor plates and attractive views over Paris. The location will also improve even further as a result of nearby infrastructure developments with the completion of the Grand Paris public transport due in 2025 immediately alongside the building.
Jeff O'Dwyer, SEREIT Investment Manager, commented:
"This value-enhancing asset management activity is entirely consistent with our active approach to managing the properties in the portfolio. Our strategy at acquisition was founded on leveraging our established presence in the Paris market to capture value, initially through leasing activity and maximising income security through to improving the overall quality of the building.
"Since acquisition this asset management expertise has added 10% to value relative to initial purchase price. We anticipate further long term growth beyond this as other business plan initiatives are implemented.
"Our Winning Cities strategy positions the company well to benefit from the buoyant macro-European outlook. We continue to see attractive investment opportunities across a number of different sectors and look forward to growing the portfolio."
Enquiries:
Duncan Owen/Tony Smedley
Schroder Real Estate Investment Management Limited Tel: 020 7658 6000
Ria Vavakis
Schroder Investment Management Limited Tel: 020 7658 2371
FTI Consulting
Dido Laurimore/Richard Gotla/ Ellie Sweeney Tel: 020 3727 1575
JSE Sponsor: PSG Capital Proprietary Limited
[1] Excluding the potential lease agreement on 400 sqm of vacant accommodation
This information is provided by RNS
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