French Eurazeo’s Paris fashion centre buy said around €220m

Source : PIE – REFI - 02 07 2015

French listed investment group Eurazeo has acquired a 78% stake in the CIFA Fashion Business Centre in Paris, its first investment there for its Eurazeo Patrimoine real estate management division. Specialists estimated the price at around €220m. Eurazeo did not disclose full financial details but said it represents an equity-financed investment of just €26.5m.

The remainder was funded under a bank leasing arrangement (crédit bail), in which an acquisition is made by a bank and the property leased to the real estate firm. It then pays rent to the bank and ultimately has an option to buy the asset. The company was advised on this financial structure by the privately-held firm First Growth - FGREF.

Renaud Haberkorn, Eurazeo Patrimoine CIO and also CEO of ANF, commented: "This first investment in the Paris region provides Eurazeo Patrimoine with an asset that combines a high return with secure rental income. It is also a unique opportunity to capitalise on a high-growth zone that will ultimately benefit from the prospects the greater Paris region can offer."

CIFA was built between 2006 and 2014 and is one of the leading ready-to-wear wholesale centres in Europe, occupying 38,000 sq.m. on a 3.5ha site in Aubervilliers on the northeastern edge of Paris. The asset is 94% let to 264 tenants, generating annual rents of over €15m, according to Easton Corporate Finance, which advised the exiting family shareholders. "CIFA presents numerous advantages for its tenants and their clients: a tremendous accessibility that will be boosted by the upcoming creation of

new metro stations as part of the Grand Paris project," said Eurazeo. Eurazeo Patrimoine will seek to invest in more real estate firms, adopting an opportunity-centered strategy for Paris and certain European markets. It said it aims to repeat the success it has enjoyed through its stake in ANF.