Â鶹ӳ»­

France’s Primonial REIM is starting discussions with an international investment manager to create a joint platform which will focus on investments and equity raising abroad.

The Paris-based real estate investment manager is working on the creation of an international platform which will allow it to expand its reach outside France, board chairman Laurent Fléchet told PropertyEU in an interview.

‘We are about to start investing for foreign clients as part of our target to grow internationally. However, this is not something we want to do alone. We are working to create a partnership with an international player active in a number of European markets,’ Fléchet said. The chairman of the board has over 10 years of experience in property investment management, having worked for AEW Europe and Ciloger in the past. In June 2011, he joined Groupe Primonial as managing director of real estate ahead of the group’s launch of the real estate investment management subsidiary later that year.

Fléchet declined to provide further details about the operation, which is still being finalised, he noted.

Primonial REIM has been one of the most active buyers this year in France, having bought the 23,000 m2 Okabé centre from Altarea Cogedim, an office building in Paris for €165 mln as well as the flagship Tour Adria at La Défense financial district in Paris for €450 mln.

Fléchet: ‘We have a core/core-plus mandate to look for big-ticket acquisitions for a number of institutional clients with a long-term focus. The Tour Adria acquisition, where we lined up five investors in a club deal, was part of this strategy.'

In total, Primonial raised between €400 and €500 mln on behalf of its OPCI investment funds for institutional investors, giving it spending power of €700 mln including leverage of around 35%. Another €350 mln to €400 mln was raised for the group’s SCPI vehicles for retail clients, giving the company the largest slice of inflows in the sector.

‘We are going to invest more than €1.1-1.2 bn in France this year, a substantial increase on last year’s volume of €700 mln,’ Fléchet commented, adding that €1.1 bn worth of deals has already been signed. The company focuses exclusively on office, retail and healthcare assets, he added.

‘We have a good picture of what we want to achieve this year. In the coming three months, we want to be able to sign another club deal of €200-300 mln.’ By year-end 2013, the company hopes to have some €3 bn of assets under its belt, including €1.3 bn for its SCPI and €1.7 bn for its OPCI funds.

Despite the record fundraising haul in the past year, the investment management market continues to be challenging in France, says Fléchet. ‘Everything changed after the onset of the credit crisis in 2008,’ he said. ‘Today, it is far more difficult to launch a fund without giving investors a concrete idea of the properties the fund will be investing in. You need to present the investment opportunity and this means you have to negotiate on two sides [i.e. with the vendor and with the investors]. Furthermore, investors require the asset manager to be aligned with them and completely involved. Finally, investors are very risk-adverse and you need to convince them about taking on more risk in order to get interesting returns. They tend to focus on true core assets, and are prepared to pay a lot for high-quality but few of them would venture into value-add products.’