PREI joins with Groupe Hoche for €150m French JV

The tie-up between the real estate investment arm of insurance giant Prudential Financial and Paris-based developer Groupe Hoche forms part of its strategy of partnering local operators in markets it believes offer value creation.

Pramerica Real Estate Investors (PREI), the real estate investment arm of the insurance giant Prudential Financial, is to increase its exposure to France through a joint venture with a local developer.

PREI announced today it had teamed up with Paris-based Groupe Hoche to invest in residential and office developments in the capital city, to which it has already committed an initial €25 million to three schemes.

While the initial investments will be made in Paris, other French cities including Lyon and Toulouse could also figure, the firm said. The joint venture is expected to invest approximately €150 million into its schemes, including debt.

PREI said the venture had been structured by its opportunistic investment team, based in its London office, with the view to providing opportunistic returns to its institutional investors.

PREI said the venture formed part of its strategy of locating and investing alongside local partners in markets it feels can provide opportunities to create value. Other JVs include a €82 million residential development partnership with Aros in Sweden and two logistics ventures with US developer Panattoni.

Groupe Hoche, established in 1997, is known for undertaking refurbishments and developments of residential and office properties both for its own capital and for that of third parties.

Phillip Barrett, managing director of Pramerica’s London-based merchant banking group, said: “The recent credit crisis created the need for new residential and office space in France, and we needed a local partner with the expertise and track record to help us to provide our investors with the opportunity to benefit from the current demand in a well-performing market. Groupe Hoche meets these requirements perfectly and we are looking forward to getting our first three developments underway while working together to complete further transactions.”