Irish firm invests €135.8m on Continent

Overseas InvestmentsIrish wealth management agencies are continuing to buy commercial property investments in France.

Custom House Capital (CHC) has just spent €135.8 million on three properties, two of them in Paris and the other in Le Havre.

The purchase coincided with the launch of the "CHC Prime Property Fund 2" which will have the two Parisian properties at Issy-les-Moulineaux and a shopping centre near Munich. The minimum investment threshold will be €250,000.

Harry Cassidy, chief executive of Custom House Capital, said they expected investors to be attracted by the benefit from exposure to European property, an attractive tax position and, if needed, equity financing.

The two investments acquired in Paris are office complexes, Panorama Seine and Dockside, on the River Seine which are due to be completed next year. The larger of the two, Panorama Seine, an eight-storey over basement block will extend to 7,893sq m (84,960sq ft) and will have 71 car-parking spaces.

The second block, a two-storey building over basement, will have a floor area of 2,000sq m (21,528sq ft) and 47 car-parking spaces.

Bought for €108 million, including costs, the investment will show a gross yield of 4.6 per cent and a net yield of 4.2 per cent.

Both buildings have been pre-let on a 12-year fixed lease to Sodexho Alliance, a prominent company in food and facilities management.

The combined annual rent will be almost €4.5 million.

The vendors were AXA and the French developer SelfriCime.

The third property acquired by Custom House Capital is a six-storey office and retail build known as Le Colbert at Le Havre.

Its cost, inclusive of transactions costs, was €27,880,226.

Le Colbert lies in the rejuvenated New Stations Business District close to Le Havre city centre.

The building was completed in 2005 and extends to 10,021sq m (107,865sq ft) with five floors in office use and the ground floor in retail units. It has parking for 216 cars.

La Colbert is held in a single property investment fund which is already fully funded. The gross initial yield is about 6.26 per cent while the net initial return is 5.68 per cent.

The building is fully let to a number of tenants including Credit Lyonnais, the mortgage financing broker Meilleurtaux and offices of France's Department of Economy, Industry and Finance.

Suzanne Fitzgerald of Knight Frank Ganly Walters, who advised CHC, said France was continuing to offer good opportunities to Irish investors.

"The market fundamentals are strong and there are still good deals to be had, particularly outside the prime CBD in Paris."