Patron goes continental

As the London-based firm steps up its investment effort in France, it makes acquisitions in Germany and the UK.

It's been a busy month for London's Patron Capital. At the start of the month the firm took part in a €450 million ($537 million) deal to acquire a 230,000 square meter portfolio in France comprising two large leisure parks, two smaller leisure entities and four office buildings.

Among the assets Patron acquired is the Tour Anjou in La Defense, Paris, a building primarily occupied by the consulting group Cap Gemini. The portfolio also includes two holiday parks in Normandie and Sologne that are let to Pierre et Vacances, the French leisure park operator.

Patron has made the investment alongside Bertrand Schwab and Patrick Sabban, two French partners who will look after the day-to-day management of the portfolio. Schwab is a long-term affiliate of Patron who worked with the firm on the purchase of the Hotel Arts complex in Spain three years ago, a deal that returned nearly four times Patron's invested capital.

The vendor was Jason Capital Corp Sa, a Luxembourg-based holding company controlled by a private investor. HSBC-CCF acted as sole mandated lead arranger to finance the deal.

According to Keith Breslauer, Patron's founder and managing director, the firm is investing approximately €75 million of equity capital in the portfolio and will be inviting co-investors into the deal.

He added that Patron was expecting to make additional purchases in France, describing the present investment as a “platform for further growth in the French market. [We] expect to implement an active acquisition strategy throughout France.”

As the firm was announcing this deal, it was also making inroads into Germany. The firm has acquired the Handelshof, a 20,000 square meter listed building in central Leipzig, for an undisclosed price. In a former life the building was an exhibition center used by the city's trade fair.

Patron has teamed up with a local property developer, Leipziger Stadtbau, and plans to redevelop the building as a mixed-use block containing retail space in the basement and first two floors. The firm hopes that by the time the building is completed in 2008 it will include 17,050 square meters of leasing space.

And on July 15th, Patron announced a third deal rather closer to home: the acquisition of a 55 percent share in nine regional office buildings in the UK from Delek Belron International, the real estate arm of the Israeli fuel corporation. The enterprise value of the portfolio, which totals around 450,000 square feet of office space, is in excess of £100 million. Patron is currently investing its second institutional fund, which it closed late last year on €303 million. Its vintage 2002 first fund is projecting an IRR of around 50 percent and an equity multiple of 2.15.