PARIS-French REIT/SIIC Gecina has increased its stake in the company owning the proposed Beaugrenelle shopping center project here, but said the investment is a one-off move rather than the start of a shift into retail assets. Gecina bought a further 25% in SCI Beaugrenelle from SCI Pont de Grenelle, taking its stake in the company to 75%.
The cost of the operation was $75 million after factoring in partial repayment of an advance granted by SCI Pont de Grenelle to SCI Beaugrenelle. But the final amount may be higher depending on the valuation recorded after delivery.
“By taking the lead on this exceptional project, the group is seizing a unique opportunity to develop a shopping centre at the heart of Paris, offering significant value creation potential and profitability of over 8%. Beaugrenelle does not however represent the starting point for growth in shopping centers. Gecina’s strategy remains firmly focused on the office, residential and healthcare business lines,” said CEO Christophe Clamageran.
Gecina’s $14.7 billion portfolio mainly consists of office and residential buildings in Paris and the region, student residences, logistics platforms, healthcare and hotels. But it has been involved in Beaugrenelle from the outset. The centre will have a GLA of almost 484,000 square feet in the 15th arrondissement of Paris. Total investment will be $520 million. The mall is due to be delivered during the second half of 2013 following a recent administrative court ruling in favour of SCI Beaugrenelle over claims made relating to the building permits.
Allan Saunderson is a managing editor of Property Investor Europe and a contributor to GlobeSt.com.
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