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Hammerson quits new Paris building 5% below cost

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 Néo, a 26,700 m² freehold office building on Boulevard Haussmann, to a German fund, KanAm Grund Kapitalanlagegesellschaft mbH, for a net €269 million, giving a 5.8% yield on the €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 Néo. 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.”

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