The firm is set to receive $1.4m compensation for the loss of potential rental income from the French government.
Cromwell European Real Estate Investment Trust (CEREIT) has regained full control over its 10-ha freehold site Parc des Docks Saint-Ouen asset in Paris, France, an announcement revealed.
The French government has agreed to compensate CEREIT with an amount of $1.4m (EUR907,128) for the loss of potential rental income borne by CEREIT since listing, after the authorities’ decision to not expropriate the site.
The asset has a net lettable area of 73,371 sqm of warehouse and ancillary office space. It was independently valued at $176.17m (EUR114.1m) as at 31 December 2018, which was 16.4% higher than the $151.31m (EUR98m) CEREIT paid for it in 2017. The asset, which is also said to be CEREIT’s third-largest asset by value, is located in Saint-Ouen sur Seine, a municipality that is set to benefit from rejuvenation and urban renewal works, in part, stimulated by the $54.04b (EUR35b) “Grand Paris Express” urban infrastructure project.
French authorities had reportedly been mulling whether to take possession of the site to develop a hospital, university and school, given its long-term urban renewal potential.
According to Simon Garing, Cromwell EREIT Management’s CEO and executive director, the firm has regained full control of its 10-ha site and has renewed marketing efforts to extend leases and secure new customers.
“Current and prospective businesses have expressed strong interest in leasing space at the asset, given its last-mile location attracting logistics and e-commerce-related businesses. We anticipate that its occupancy rate, which currently stands at 83%, will increase substantially over the rest of 2019,” he highlighted.
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