Oxford Properties Group, the real estate arm of OMERS, the pension plan for municipal employees in the Province of Ontario, has acquired 92 Avenue de France from a joint venture between GLL Real Estate and Union Investment Real Estate GmbH. 92 Avenue de France is a modern and fully occupied 235,000 square foot office building in the 13th arrondissement that is 100 per cent leased to Réseau Ferré de France, the state controlled manager of the French railway network.
The acquisition represents Oxford’s second in Continental Europe, following its recent entry into the Paris market in September 2014 with its purchase of 32 Rue Blanche, a 237,500 square foot prime Grade A office, from The Carlyle Group. As a result of the transaction, Oxford is now almost halfway towards its stated target of growing its assets under management in Paris to over €1 billion within the next three years. In addition, the acquisition has grown Oxford’s wider European portfolio to over CAD$5 billion (€3.6 billion) of assets of under management comprising office and retail assets across the Central London and Paris.
92 Avenue de France is located in the Paris Rive-Gauche submarket of the 13th arrondissement, an established and growing business district on the east side of Central Paris. This sub-market is one of the best performing sections of the Paris office market and is typified by historically low vacancy rates (below 3.0 per cent since 2006), broad occupational demand and low levels of rental volatility. In addition, structural constraints on new office supply and future transport infrastructure improvements provide the sub-market with compelling real estate fundamentals and the area is set to be a major beneficiary of the introduction of the Grand Paris Metro project in 2017-2020.
One of the world’s most liquid real estate markets, Paris, as a key global business and cultural centre, is home to the highest number of Fortune 500 companies in Europe and ranks second globally. Oxford believes it is an attractive time to invest in the Paris market with the prospect of significant growth driven in the near-term by a low-interest rate environment and, longer-term, a broader economic recovery over the coming years.
Hines France acted as acquisition adviser to Oxford Properties Group and will act as asset manager.