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Schroder European REIT sells Paris office for €104m

Schroder European REIT (SERE) has forward sold an office in Paris for €104m, delivering a net profit of 35% and increasing the company’s net asset value by 15%.

The sale of the Boulogne-Billancourt office asset, which was originally acquired in 2016 for €37.5m, is structured as a forward funding, with the building being handed over to the purchaser in H1 2022 following completion of a comprehensive refurbishment which is being undertaken by the company.

The refurbishment and sale follows the agreement of a new 10-year pre-let contract with existing tenant Alten in June this year. The rental uplift is 39% higher than the previous rent paid.

The final sale price of €104m will deliver net sale proceeds of around €70m when completed, after deducting the €30m cost of refurbishing and re-letting the building. This represents a profit on cost of 35%.

The sale proceeds will be received in stages and the company said it expects the NAV to increase incrementally as sale receipts occur. Half of the sale price is to be received on exchange of the definitive deed prior to this calendar year end, with the remainder payable in installments over the subsequent 18 months as construction is completed. The overall increase to the most recent published NAV as at 30 June 2020 is expected to be approximately 15%, subject to programme and cost.

The group said the funds will primarily be redeployed into new earnings enhancing initiatives including new investments.

SERE : Schroder European REIT sells Paris office for €104m

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