US-based developer-investor Hines and German investment company Universal-Investment have closed the €600 mln acquisition of a flagship retail asset on Paris' Champs-Elysées from EPI, a French independent investment group owned by the family of French billionaire Christopher Descours.
Hines is signing the deal on behalf of client Bayerische Versorgungskammer (BVK), with €300 mln in debt finance provided by Allianz Real Estate. The US group won a high-street investment mandate from BVK in 2015 and has since invested over €850 mln in the sector on behalf of its client.
Investment bank Morgan Stanley and broker JLL were hired last year to sell the asset, which will become Apple's flagship store in Continental Europe after a comprehensive refurbishment programme designed by Pritzker prize-winning architect Norman Foster of Foster + Partners.
EPI bought the 5,500-m2 asset in 2009 and pre-let it to Apple earlier this year.
Peter Epping, senior managing director – investment management for Hines and fund manager for the BVK account, said, 'Located on one of the most iconic avenues in the world, the acquisition of 114 Champs-Elysées is a significant strategic investment for BVK which complements its existing retail holdings across Europe. We are proud to have worked on such an important deal.'
Lars Huber, CEO of Hines Europe, added: 'This latest acquisition is an excellent example of our strategy to invest in prime permanent retail assets across Europe. This deal further demonstrates our strong partnership with BVK, and our commitment to the retail sector in France. We will continue to assess investment opportunities of similar high quality in Paris’ most dynamic locations.'
Xavier Musseau, managing director of Hines France, said, 'This transaction confirms how relevant our investment management model is proving to be, enabling us to secure off-market deals and increase our portfolio of assets under management to €3 bn in France. Our aim is to continue to focus on the high-street retail sector.'
The exceptional loan maturity proposed by Allianz was 'key' to the success of the deal, according to Xavier Musseau, managing director of Hines France. 'It was a real team effort between Allianz and Hines to achieve that debt financing in a short period of time.'
In 2017, Allianz Real Estate's European debt portfolio increased by €1.9 bn to €6.3 bn, with deals including the €312 mln financing for Atrium in Amsterdam and €300 mln for Window in Paris. It also expanded into the UK, including the refinance of 55 Baker Street, a mixed-use building in London’s West End.
Roland Fuchs, head of European Debt at Allianz Real Estate, said that the company will continue to be active with a similar level in 2018. 'We expect European debt to play a continued central role in our asset growth in 2018 and beyond, both in core markets such as France and Germany but also in new territories.'