WP Carey Adds 1M-SF in France for $103M

NEUILLY-SUR-SEINE-Continuing to take advantage of a growing sale/leaseback market in Europe, WP Carey acquired for $103 million five office and industrial buildings in France that are net leased by locally based Thales Group SA, one of the largest military contractors in the world. New York-based WP Carey made the purchase on behalf of its public, non-traded REITs CPA 15 and CPA 16-Global.The one- and two-story properties are located in the cities of St. Quentin-en-Yvelines, Conflans, Ymare, Aubagne and Laval. CPA 15 will own a 65% stake in the assets and CPA 16-Global will own the remaining 35%. The acquisition takes WP Carey’s managed property portfolio in France to 7.8 million sf.Jeff Lefleur, a VP in WP Carey’s investment group, tells GlobeSt.com that Thales’ remaining lease term is “not very long,” but adds that “we’re confident Thales will renew (its) leases because these are critical assets for its defense electronics group.” If for some reason Thales does not renew, Lefleur says WP Carey is confident of its ability to quickly backfill the space because the assets are “in fairly good condition and in fairly good locations.”Currently, about 70% of corporate real estate in Europe is owner occupied, which compares to about 30% in the US, but the number of corporations entertaining the sale/leaseback route is growing, according to WP Carey. “We anticipate an increase in our investment volume in the months ahead as more European companies realize the benefits (of sale/leaseback transactions),” says WP Carey chief investment officer Edward LaPluma. In July, WP Carey closed another major transaction, acquiring 465,000 sf of facilities in Espoo, Finland for $95 million on behalf of the same two REITs. The buildings were sold by TietoEnator Plc, which leased back the facilities long-term.The buildings include TietoEnator’s chief technology facility and a corporate office. The buildings are located in Finland’s technical research center adjacent to the Helsinki University of Technology and the Technical Research Center of Finland. CPA 15 will own a 60% interest in the leasehold and CPA 16-Global will hold the remaining 40% interest. Lefleur tells GlobeSt.com that with these two major deals out of the way, WP Carey can move to the front burner several smaller deals in France that it hopes to close by year-end. “We are close on a number of deals,” says Lefleur.