The joint venture vehicle established last year by Hermes Investment Management, the £26 billion manager focused on delivering superior, sustainable, risk adjusted returns to its clients – responsibly, and Redevco, the pan-European retail real estate specialist, has made its first investment by acquiring the property “L’Espace du Palais” in the French city Rouen.
The Redevco/Hermes Investment Management European joint venture is targeting investments in high street properties, shopping centres and retail parks in need of hands-on asset management in France, Germany, the Benelux countries and the Nordic region. The property in Rouen was acquired from a fund advised by KKR and its operating partner Seefar. The price of the transaction is not being disclosed.
Andrew Vaughan, CEO of Redevco, said: “This investment matches perfectly with the joint venture’s strategy as it offers significant scope for value creation through refurbishment and as-tute asset management. With large-scale city centre operations in the European regional metropoles already, we offer considerable expertise in the local retail markets and we have close working relationships with municipalities and other local authorities. We are looking to extend Redevco’s platform through more acquisitions similar to this one in Rouen.”
Chris Taylor, Head of Private Markets at Hermes Investment Management, said: “The ongo-ing developments in retailing in Western Continental Europe, including longer-term urbanisation trends and demographic lifestyle shifts, are creating opportunities for redeveloping city centre retail that will meet changing occupational requirements, making an attractive proposition for our core+/value-add strategy. Working in partnership with a like-minded, long term investor such as Redevco in acquiring this property, will enable us to deliver added value from our asset manage-ment approach.”
“L’Espace du Palais” in the centre of Rouen, 130 km northwest of Paris, is approximately 10,000 sq.m. and comprises 30 units with Fnac as its anchor tenant. The first steps by the new owners will be to reinforce the visibility of the shopping centre and its commercial positioning by reversing its introvert conception to an extrovert appearance. The objective is to revitalise the existing site as part of a global refurbishment ambition of the city centre already commenced by local authorities.
Rouen has a primary catchment area of 480,000 inhabitants in the surrounding Normandy region, which has higher incomes than the French national average. The city ranks 12th in France with a “Very Good” label in Redevco’s City Attractiveness ranking.
Full deployment of the asset is planned for 2019.