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French asset manager La Française plans to launch a successor fund to its LFP Immo SR office investment vehicle in the first quarter of 2013, targeting a minimum equity volume of EUR 200 mln.

'The first LFP Immo SR fund was a great success,' managing director Marc Bertrand told PropertyEU in an interview. Launched in 2009, LFP Immo SR raised EUR 130 mln of funds from investors. 'In terms of fundraising, we expect the second vehicle will do better than the first although the success of the marketing process will also be linked to the overall economic performance early next year.' Bertrand added.

The group is seeking to extend its investment horizon with a number of international investors, particularly from the Nordics and GCC countries, he said.

In terms of investment focus, LFP Immo SR will largely be concentrating on green, modern office buildings both in Paris and the regional cities. 'We will mainly concentrate on offices as we anticipate a growing shortage of new buildings due to a lack of development.'

The fund will be looking for income-generating assets occupied on strong leases and generating returns of between 5 and 6%.

While a vast majority of investors continue to focus on core, Bertrand said interest in more value-added investments is re-emerging in France, which is a positive sign for the market. ‘We're beginning to notice an interest in the redevelopment of outdated assets in good locations. It looks like a promise of an end to this gloomy market, because it underlines a shift in investors' risk profile and a feeble return of confidence in the eurozone’s capacity to solve the crisis.’

However, he cautioned, this trend is still in its infancy. 'In general, investors remain risk-averse and the market is plagued by lack of finance for new developments.'