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Macro Location Analysis
EvoEstate Risk rating is of an informative nature only & can not be considered investment advice.
Loan To value
The operation is located 14-16 - Rue du Faubourg Saint-Honoré in the heart of the 8th arrondissement of Paris, a few minutes from the Madeleine church, on the prestigious Rue du Faubourg Saint Honoré known for its many luxury shops and official buildings (embassies, Elysée Palace).
It is carried by North Real Estate, majority owned by Joël Chatelet, who has spent his entire career in real estate and is currently in charge of development in a listed Parisian real estate company.
This is a purchase/resale operation of a 155 m² office unit distributed as follows: Ground floor: 101.49 m², ground floor: 15.67 m² and first floor: 38.77 m². It is located on the courtyard and is occupied by a lease from a major fashion designer. The latter is retiring and it is his disciple, whom he trained and who created his brand 7 years ago, who wishes to take over the premises.
A lease agreement with North Real Estate was therefore signed increasing the rent (x4.5), with a firm 12-year lease. This promise is conditional on North Real Estate acquiring the premises and the tenant leaving on 21/12/2021.
The future tenant will bring the premises up to standard but North Real Estate will partially finance the work, which is estimated at €100,000 for a period of 3 months.
The margin is very high on the operation (44%) with an assumed rate of return of 3.64%. The rate of return is consistent with the market given the location of the property and the long lease.
Raizers has been asked to acquire the land, which is due to take place on 20/12/2021, with a first-ranking mortgage (LTV of 37%) and the personal guarantee of Mr Chatelet as security.
The development is located at no. 14 rue du Faubourg Saint-Honoré, next to the Lanvin, Hermès, Prada and Cartier boutiques. It has excellent public transport links, with the RER A serving Opéra a ten-minute walk away and the Concorde (Line 1) and Madeleine (Lines 14, 8 and 12) metro stops less than five minutes away on foot.
Zoom on the programme
A joint owner is selling, via the real estate agency OPTIREAL, by mutual agreement, an office unit located in the courtyard of 14-16 rue du Faubourg Saint Honoré in Paris 8e (next to the main Hermès shop and opposite Berlutti). The unit is occupied by a lease ending on 17 July 2020 and has 155 sqm of usable space distributed as follows:
It should be noted that only 30% of the basement will be taken into account in the price/m² calculations, i.e. 84.9 m².
The following works will be carried out by the lessee, but the lessor will reimburse an amount of €100,000 exclusive of tax on invoices corresponding to the following works for a period of 3 months:
The future rent over 12 years is €61,000 excl. VAT, i.e. €718/m², which seems coherent compared to the standards, €930/m² according to Knight Franck (prime rent in the CBD) and €635/m² according to Immostat in Central West Paris, but which does not take into account the exceptional location of the property.
The operator had a valuation of the asset carried out by OPTIREAL on 8 November 2021. This report concludes with a value of €1,640,548 excluding VAT (average of the DCF valuation and capitalisation at a rate of 3.5%).
Average rate of return
According to Knight Franck, the average expected yield in the Paris Central Business District* is between 2.75 and 3% at the end of Q3 2021. A discount may be applied due to the type of property on the courtyard and ground floor. Thus, assuming a capitalisation rate of 2.75% to 3.75%, the price variation is as follows
2 171 970
1 990 972
1 837 821
1 706 548
1 640 548
1 592 778
Price at m²
The capitalisation rate of 3.64% retained by the operator's valuation therefore seems coherent.
Focus on the new tenant CPH Parfums and the guarantor CPH & A
CPH Parfums is 77% owned by CPH & A (holding company) and 22% by its founder.
In 2016, the founder launched his own perfume business after having worked in fashion, notably for Hermès and Jean-Paul Gaultier.
Perfumery has since become his main activity, with the house's fragrances available in nearly 200 points of sale. He has also opened two Parisian boutiques in the 1st and 9th arrondissements.
Key figures as of 31/07/2020 for CPH Parfums :
Total Balance Sheet: € 154,659
The operation is being carried out by North Real Estate, with a capital of €111,200, registered in the Paris Trade and Companies Register under number 804 946 697, on 29/08/2016.
The bond will be issued by SAS North Real Estate at an annual rate of 10% per annum, for a term of 24 months*. The bond will be repaid upon sale of the property by the operator, interest is paid annually but guaranteed for a minimum period of 6 months.
In order to provide additional guarantees, the repayment of the bond is secured by :
The bond contract provides for early repayment if :
All documents related to this fundraising are available in the "documentation" tab.
* Please note that the Maturity Date provided for in the Bond Agreement may change in particular in the event of early redemption, early repayment or in the event of the exercise of the option offered to the Issuer and provided for in article 9.2 of the Bond Agreement.
Amounts excl. VAT
Amounts incl. VAT
Comments (€ excl. VAT/m²)
Sale Local Commercial
1 640 548
1 968 658
19 326 €/m²
1 747 298
2 096 758
7 647 €/m²
Cost of acquisition
9 753 €/m²
Total cost of ownership
1 011 387
11 578 €/m²
1 085 370
As a % of turnover
It should be noted that the commercialisation fees will be paid by the purchaser and are therefore removed from the balance sheet of the operation.
The valuation used here is that of the operator.
Simulation of the gross margin of the project according to different capitalisation rates (excluding rent):
Rent excluding tax/expenses
1 706 548
1 640 548
1 592 778
1 493 229
1 405 392
Price at m²
As a % of turnover
Margin reinstating equity
Even with higher capitalisation rates than the one retained by the operator, the margin remains very comfortable with a breakeven capitalisation rate on this operation of 6.63%, which is well above standard.
Cost price at acquisition including VAT
(= total expenses before tax + VAT - financial costs - commercialisation costs)
Operator equity contribution :
81 387 €
Bond issued on the platform :
775 000 €
856 387 €
856 387 €
Calculation of the LTV (Loan To Value): 37%.
Calculation of the LTC (Loan To Cost): 77%
Calculation of the LTA (Loan To Acquisition): 119%
Presentation of the operator
Joël Chatelet, 44, French:
Mr Chatelet started his career at SIIC de Paris (€700m assets) in 2002 after studying management and finance. The company was then merged with other real estate companies to create Foncière de Paris SIIC (€3 billion in assets), where Mr Chatelet successively worked as an authorised representative and then as a deputy director in charge of acquisition, marketing and development of buildings.
Purchase and development and leasing of the head offices of Saint Laurent Paris (12500 m² 250 M€), Lacoste (15000 m² 140 M€), SNCF networks (15000 m² 120 M€), 41-45 st Dominique leased by Latham and Watkins 12000 m² ( 200 M€), Salesforce head office (9000 m² 180 M€), ...
La Foncière de Paris was bought by Eurosic and then Gecina. Since 2017, he has been working as a development manager for a major Parisian real estate company. He is also a member of the Association des Directeurs Immobiliers and ARSEG.
The other shareholders are minority shareholders and are dormant shareholders in North Real Estate who have made financial contributions.