Altarea Cogedim strikes first deal for €600m fund

The listed French real estate company has acquired an office in Paris on behalf of its value-added/opportunistic real estate fund.

Listed French property company Altarea Cogedim has put the finishing touches to its first deal on behalf of its €600 million value-added/opportunistic office fund, AltaFund, which wrapped up fundraising in November.

In a statement today, the developer-cum-fund manager said it purchased a 1970s office building in the center of Paris' 6th arrondissement at 128/130 Boulevard Raspail. Acknowledging its value-added/opportunistic strategy, the company said it would improve the 9,900-square-metre asset and eventually sell it as a core product.

The transaction is a watershed moment for Altarea Cogedim as this is the first investment by the company on behalf of its office-focused vehicle promising mid-teen returns to investors, which range from pensions plans to sovereign wealth funds from Asia. Limited partners include Dutch pension advisory giant APG Asset Management, the Future Fund of Australia and French insurance firm Predica.

In a statement coinciding with the first transaction, Alain Taravella, chairman and founder of Altarea Cogedim, said:  “AltaFund is the first fund of this size on the market to be managed by a French property company. This vehicle gives concrete expression to the shift in the office property strategy of the group, confirming its dual vocation in this sector as developer as well as investor, as this already is the case in the retail property sector.”

Altarea, which is listed on the NYSE Euronext Paris exchange, held a first close of €350 million in March 2011 and later added another €250 million in equity. It also disclosed that, as the general partner, Altarea was committing €100 million – or 16 percent of the total equity commitments – to the vehicle. The goal is to create a portfolio valued at €1.2 billion, including leverage.