Published: 27 June 2005
Hammerson plc has sold a Paris building completed less than 2 years ago for 5% below cost.
The London company’s chief executive, John Richards, made light of the loss, saying proceeds would be 19% above valuation at 31 December 2004.
Hammerson has sold NÃ©o, a 26,700 mÂ² freehold office building on Boulevard Haussmann, to a German fund, KanAm Grund Kapitalanlagegesellschaft mbH, for a net â‚¬269 million, giving a 5.8% yield on the â‚¬15.6 million/year rent.
The building was completed in September 2003. Its main tenant is leading French newspaper Le Figaro.Mr Richards said: “The occupational market in Paris proved to be considerably weaker than we envisaged when we started the development of NÃ©o. However, the investment market in Paris for prime offices has remained buoyant, enabling us to recycle the proceeds from this property. Hammerson has a substantial pipeline of future development opportunities, both in the retail & office sectors, and the proceeds will be invested in other projects offering good growth potential.”