AMP Capital’s Global Direct Property Fund (GDPF) has acquired a high quality seven-storey office building in L’avenue de Wagram, one of the premier precincts in the Paris CBD region, for €22 million.
The property is fully leased with high quality tenants and is located within close proximity to place Charles-de-Gaulle and Parc Monceau and is approximately 800 metres from the Arc de Triomphe.
AMP Capital Fund Manager John Dynon said now is an opportune time to secure a scarce asset in a tightly held market at an attractive price with good growth potential due to solid Paris market fundamentals.
“The Paris CBD market has traditionally been associated with high barriers to entry. Greenfield development sites are extinct with introduction of new supply almost entirely dependent on refurbishment and conversion of traditional stone buildings,” he said.
“The addition of this Paris office asset into our flagship global property fund comes at an exciting time for our investors. Global core markets and valuations have stabilised yet pricing remains compelling.
“We expect the Paris CBD office market to experience a severe space shortage in the foreseeable future, with investors set to benefit from a rapidly tightening market and vacancy rates of below 5 per cent.”
The building has a net lettable area of 2,619 sqm as well as underground parking and balconies with views across Paris. It was built in the 1930s and was recently refurbished to modern standards and technical specifications. The property is the head office to the major tenant, Sony (Sony ATV and Playstation).
The Global Direct Property Fund provides investors with access to core global direct property investment opportunities. The Fund invests in a strategic mix of international direct property assets including office and multifamily properties in Milan, California and Houston.
The Fund returned 13.8 per cent (pre tax and fees) to investors for the year to December 2010.