Catalyst Capital, the European real estate investment and fund management firm, has acquired from Real I.S. Group a portfolio of four office buildings, let to Airbus, in Toulouse for €100 million for its Catalyst Core Plus European Property Fund (CCPEPF), a €1.5 billion "evergreen" real estate fund. The four properties, which total 47,000 sq m (505,900 sq ft), have been acquired from Real IS at a net initial yield of 6.2%.
They are located in the area of Toulouse-Blagnac Airport, one of the major hubs in Europe for the aerospace and aeronautic industries and home to the headquarters of Airbus. The airport is set to benefit from significant infrastructure improvements, including the arrival of a new metro line in 2024, a new airport terminal, which opened at the end of last year and a new 80,000 sq m exhibition centre in 2020. Catalyst was advised by Lasaygues and Jones Day and Real I.S. was advised by BNP Paribas Real Estate, SBKG (Maître Vincent Lassalle) for legal matters, C&C Notaires (Notary) and DLA Piper (Maître Fanny Combourieu) on taxation. Fabrice de Clermont-Tonnerre, partner of Catalyst Capital, said: "This exceptional portfolio of strategically-located assets provides stable, long-term income, with the potential for value enhancement through capital expenditure and improved public infrastructure and transport.
"The four buildings in Toulouse are held by a closed ended fund of private investors which has now arrived to its term. It offers an attractive return for the shareholders in a context where the French regional market is very strong." commented Catherine Luithlen, Managing Director of Real I.S France. "Let by Airbus, these assets change hands but keep the same stable and long-term income for Catalyst Capital". Catalyst has secured €550m of equity commitments from international institutional investors for CCPEPF.
Using leverage, CCPEPF will have €1.5 billion to invest in income-producing assets in every commercial real estate sector, including hotels and infrastructure. Geographically, CCPEPF will focus on investment in northern Europe and the Iberian peninsula. Catalyst announced the first 10 investments for the fund for €400 million in Q1 2019. They are located in Frankfurt, Berlin, Leipzig, Paris, Wroclaw and Malmo, with lease lengths ranging between five and 25 years. As an "evergreen" fund, CCPEPF will have an indefinite life. Its final close is expected to be in the third quarter of 2019. CCPEPF expands the value-add strategy Catalyst has successfully executed for more than 20 years. Catalyst is currently raising its third European real estate fund, Catalyst European Property Fund III, targeting €500m of equity commitments with an expected first close in Q4 2019.