All posts by twenty2uTwo

French housing reforms to free up to €35bn in private rental units

Reforms are taking place in French housing that should present an opportunity to invest in 650,000 rental units worth up to €35bn, and TwentyTwo Real Estate Founder Daniel Rigny says his new Powerhouse Habitat private REIT is poised to benefit.

In a wide-ranging interview with Business Immo Europe at Mipim, Rigny explained the opportunity opened by changes in regulations introduced by President Emmanuel Macron. While these aim mainly at reforming and re-financing social housing, at the same time they could trigger up a huge sale of stock of free-market housing, much of it held for years by state enterprises.

« There are three things that Macron is doing that are affecting the social housing sector right now, » Rigny told BIE. « The first is to decrease the level of subsidies to social housing tenants, and as a consequence ask social housing firms to reduce rents – so it’s putting financial pressure on them. The second is: the government has assessed that the sector is much too fragmented and operating costs are too high, so they are pushing social housing companies to merge. » The aim is to eliminate single firms that own and manage fewer than 25,000 units.

« The objective is to force them to reduce costs and generate economies of scale for their operations, » he says. The idea is to shrink financial resources the state provides to social housing in general, obliging firms to find new ways to finance themselves. « What the government has been starting to work on is to allow social housing companies to sell stock to their tenants, » Rigny says. « And by selling units they will then be able to re-employ these proceeds to for new-build. »

The shifts are highly significant not only for companies and their tenants, but for potentially closing the large supply-demand nationwide housing gap. Residential investors, domestic and foreign, can also participate, having until now regarded France as a no-go in a European private rental sector attracting more and more capital. Selling social housing to sitting tenants was one of the key reforms introduced in Britain in the 1980s by Prime Minister Margaret Thatcher. One consequence was to bring large swathes of the population into middle-class home ownership, benefiting from residential value gains and ultimately also changing the country’s political culture.

« This is a key shift because in France the demography is very strong and that is what distinguishes France from other European markets, » Rigny says. « The birth rate in France is running at about 2 (per couple), while it’s 1.3 in Germany. It means we still need to produce a lot of social housing, and also that companies need to renovate their old stock – so they need financing to do it. What the government is saying therefore is ‘start to sell your housing to tenants and we are going to change the regulations to help you do that so that you generate proceeds by churning your stock.' »

The target for investors such as Powerhouse Habitat, which he originally launched in 2015 with the intention of floating on the stock market – but withdrew from IPO due to tight market conditions – is the component of stock owned by these firms that does not come under the social housing definition. « The social housing sector also owns a substantial amount of non-social housing in the free rental market – or housing that had an intermediary regulated positioning, until the expiry of this regulation period put it back on the free market. »

Rigny re-launched Powerhouse Habitat in January with the backing of two insurers, BNP Paribas’s Cardif, and Société Générale Assurances, and the new firm immediately took over 6,700 housing units leased directly to French electricity giant EDF for its employees. He started TwentyTwo six years earlier after spending four years as a partner with Perella Weinberg Real Estate, and prior to that several years with Deutsche Bank real estate management. With operations in the UK and France, TwentyTwo has invested since its beginnings also in commercial real estate – office, logistics and mixed use – on behalf of both institutional and private clients. Its asset base, around €4.1bn, is managed by the group’s Scaprim subsidiary.

But the opportunity that has unexpectedly opened up in Rigny’s native France is occupying a good deal of his time now. « The size we estimate in the social housing market is about 5m units and we estimate that of this, 13% – in essence intermediary housing – either already is or will come soon onto the free rental market, » he told BIE. « That’s about 650,000 units – which is €30bn to €35bn of assets. Basically that’s our target. What we want to do is to establish a dialogue with the social house companies and buy the housing en bloc which is unregulated… This in turn will provide liquidity so that they can produce, operate and fulfil their primary mission. »

Since the launch of Powerhouse Habitat, the firm has been contacted by some of the larger social housing landlords. But Rigny currently has his eye on one particular portfolio on the market – from French railway group SNCF. « It’s housing for SNCF employees so it’s very similar to our existing portfolio housing EDF employees – but at the same time this is owned through the SNCF’s social housing company, » he says. The firm has about 90,000 regulated and about 8,000 unregulated units, of which they are selling roughly half.

Looking ahead, Rigny says: « Our objective is to acquire €2bn in the next three years. SNCF is a good opportunity and there are others coming, but we would like eventually to grow to €3bn. Why €3bn? Because at that stage we also generate economies of scale – and we have access to capital markets if we want to issue bond financing. This means we can also diversify our source of funding, plus it is important to diversify the portfolio as well from the single EDF exposure… So that’s why we created Powerhouse Habitat, and that’s our focus. »

 

Copyright Business Immo Europe

Powerhouse Habitat intend to play a key role in the French residential market

Powerhouse Habitat veut mettre en œuvre une « politique d’acquisition massive de logements ».

« Jouer un rôle majeur sur le marché résidentiel français, au moyen d’une politique d’acquisition massive de logements pour les louer au niveau intermédiaire » : tel est l’objectif de Powerhouse Habitat, explique à AEF, Daniel Rigny, fondateur de TwentyTwo Real Estate qui a créé cette foncière fin 2017. Actuellement propriétaire de 6 700 maisons individuelles rachetées à EDF, Powerhouse Habitat vise la détention d’un patrimoine immobilier de trois milliards d’euros en trois ans. Pour ce faire, elle compte « acquérir d’autres portefeuilles de logements auprès d’entreprises », mais aussi « développer un dialogue avec les bailleurs sociaux » pour leur racheter des logements du secteur libre ou qui ne sont plus soumis au conventionnement.

Vous avez lancé fin 2017 la foncière Powerhouse Habitat. En quoi consiste son activité?

L’objectif de cette foncière, créée par TwentyTwo Real Estate, et regroupant les investisseurs institutionnels BNP Paribas Cardif, Société générale Insurance et l’OPCI BNP Paribas Diversipierre, est de jouer un rôle majeur sur le marché résidentiel français, au moyen d’une politique d’acquisition massive de logements pour les louer au niveau intermédiaire. Pour l’instant, le patrimoine de cette foncière est composé d’environ 6 700 maisons individuelles d’une valeur supérieure à un milliard d’euros. Ces maisons ont été vendues en 2000 par EDF qui était en quête de nouvelles liquidités. Powerhouse Habitat les a rachetées en décembre 2017 à deux fonds d’investissement.
Elles sont toujours occupées par des salariés travaillant pour le groupe, sur des centrales nucléaires, et sont donc principalement situées dans les régions de celles-ci, sur la zone littorale et les grands fleuves. La filiale Scaprim de TwentyTwo Real Estate est chargée de la gestion de ces logements de fonction pour le compte de Powerhouse Habitat et d’EDF.

En quoi votre modèle se distingue de celui proposé par les fonds de CDC Habitat ou de la nouvelle société In’li d’Action logement?

Le FLI géré par CDC Habitat se concentre sur l’acquisition de logements neufs soumis à la réglementation du logement locatif intermédiaire. De même, In’li a un objectif de production de 80 000 logements en Île-de-France soumis au dispositif LLI. Cette réglementation impose notamment un plafonnement des loyers de 15% à 20% en dessous des prix de marché. Powerhouse Habitat se concentre sur l’acquisition de logements anciens dans le secteur libre avec un positionnement locatif à des niveaux de loyers intermédiaires, de 7 à 12 euros en régions.

Vous visez les 3 milliards de patrimoine immobilier en trois ans. Comment comptez-vous y arriver?

Nous comptons acquérir d’autres portefeuilles de logements auprès d’entreprises. Nous allons par exemple nous positionner sur le patrimoine de la SNCF sur lequel elle a démarré un processus de cession. Nous sommes aussi en train de développer un dialogue avec les bailleurs sociaux pour voir si nous pourrions leur racheter des logements du secteur libre ou qui ne sont plus soumis au conventionnement. Les bailleurs sociaux doivent en effet trouver des relais de financement car leurs ressources sont en constante diminution mais les exigences de production sont toujours aussi importantes.

Le logement redevient donc une classe d’actifs intéressante pour les investisseurs institutionnels?

Daniel Rigny : Oui, le logement a un certain attrait car même s’il génère moins de rendement courant que d’autres classes d’actifs, il est très peu volatil. Le rythme d’obsolescence est également plus faible pour les logements que pour les bureaux par exemple. L’Allemagne a beaucoup développé le modèle des foncières cotées qui investissent sur le segment résidentiel. Celles-ci proposent un rendement entre 3,5% et 5% en dividende sur les fonds propres investis, ce qui est possible sur le modèle que nous développons. Après prise en compte de l’effet de levier financier (c’est-à-dire les loyers diminués du coût de la dette), nous sommes capables d’atteindre nous aussi un niveau de rentabilité courante de 5% sur fonds propres.

Eu égard à votre activité que retenez-vous des discussions autour de l’avant-projet de loi Elan et de la conférence de consensus sur le logement?

Oui, nous trouvons intéressantes celles relatives à la libéralisation de la politique patrimoniale des bailleurs sociaux via la facilitation de la vente HLM aux locataires. Le message délivré par le gouvernement est positif, car il peut créer un appel d’air pour notre activité. Les bailleurs sociaux représentent un enjeu important pour nous dans le sens où on dénombre environ 5 millions de logements dans ce secteur dont environ 13% de logements locatifs à des niveaux de loyer intermédiaires ou plus conventionnés, soit une valeur estimée à 30 milliards d’euros. Je pense qu’à terme il faudrait aussi des dispositions pour faciliter la cession de logements encore conventionnés par les organismes HLM.
S’agissant des dispositifs dédiés aux investisseurs institutionnels dans l’avant-projet de loi Elan, elles concernent pour le moment des mesures destinées essentiellement à la construction neuve ou quasi-neuve (libération de foncier, simplification des procédures d’urbanisme et de l’acte de construire, transformation de bureaux en logements), et sont donc un peu à la marge pour nous, même si elles sont nécessaires car la demande est forte.

Copyright AEF Urbanisme Habitat

TwentyTwo Real Estate and its subsidiary Scaprim are launching Powerhouse Habitat

TwentyTwo Real Estate and its subsidiary Scaprim are launching Powerhouse Habitat, a residential private REIT backed by institutional investors BNP Paribas Cardif and Société Générale Insurance.

 

  • A residential portfolio worth more than €1 billion
  • Ambition to grow the portfolio size to €3 billion within three years

 

TwentyTwo Real Estate, an independent firm dedicated to real estate investment in Europe, announces the launch of Powerhouse Habitat, a residential private REIT, backed by institutional investors BNP Paribas Cardif, Société Générale Insurance and OPCI BNP Paribas Diversipierre.

Powerhouse Habitat’s portfolio consists of approximately 6,700 single-family units worth more than €1 billion, located throughout France and mainly leased to EDF.

Powerhouse Habitat has the ambition to become a major and structurally important player in the French residential market through further acquisitions of affordable rental housing units in the private sector. These will be located mainly in French regions with strong economic and demographic fundamentals.

To fulfill this ambition, Powerhouse Habitat aims to triple the size of its property portfolio over the next three years to reach €3 billion.

The portfolio was purchased by Powerhouse Habitat from Massena Partners and Farallon Capital Management.

TwentyTwo Real Estate, which completed the transaction, will continue to manage the property portfolio through its subsidiary, Scaprim.

Daniel Rigny, founder of TwentyTwo Real Estate said: « This transaction is the founding act of Powerhouse Habitat, which benefits from a high quality initial property portfolio. The affordable housing sector, which will be the focus of the company, enjoys strong fundamentals, supported by favorable demographics, and offers attractive growth opportunities.

As a result of its institutional shareholder base and our operational expertise throughout France, the development of Powerhouse Habitat is founded on a long-term ownership strategy and proximity management that will place tenant satisfaction at the forefront of its priorities.”

Nathalie Robin, Real Estate Director at BNP Paribas Cardif, said: « The creation and development of Powerhouse Habitat is part of our strategy to strengthen and diversify our investments into the residential sector.”

Yann Briand, Real Estate Director at Société Générale Insurance said: « Our investment in Powerhouse Habitat materializes our desire to diversify our real estate portfolio into the residential sector. »

BNP Paribas Cardif, Société Générale Insurance and OPCI BNP Paribas Diversipierre were advised by White&Case, Mazars, Cheuvreux and Fidal.

Press contacts

FTI Consulting
Astrid Villette – 01 47 03 69 51
astrid.villette@fticonsulting.com
Rémi Salvador – 01 47 03 68 11
remi.salvador@fticonsulting.com

TwentyTwo Real Estate
Nicolas Beurton – +33 (0)1 53 93 10 53
www.twentytworealestate.com

About TwentyTwo Real Estate

TwentyTwo Real Estate, founded by Daniel Rigny in 2012, is an independent European real estate firm dedicated to providing a full range of investment solutions and management services to both institutional and private clients.

Based in London, Luxembourg and France, TwentyTwo Real Estate manages more than €4 billion of assets and combines hands-on operational expertise and strong financial acumen to offer value accretive investment strategies across all real estate asset classes.

Officiis Properties’ portfolio reaches 95% occupancy

Officiis Properties, a Euronext Paris-listed office REIT, announced this week that 95% of its portfolio is now let

This announcement followed the signing of two leases with McCann WorldGroup France for the entire Think building and an entire floor in the Newtime building.

McCann Worldgroup France, a world leader in advertising and a subsidiary of the American IPG group, has decided to take up 8,450 sqm in the Ecosphère Campus, comprising the Newtime, Think and Imagine buildings on Île de la Jatte in Neuilly-sur-Seine.

McCann Worldgroup France will take up the entire Think building, which is currently being redeveloped, occupying a total of 6,650 sqm. It has also signed a lease for 1,800 sqm covering an entire floor in the neighbouring Newtime building, which has also been redeveloped recently.

These leases will come into effect in the second half of 2018, once the Think building has been delivered and fitted out for McCann Worldgroup France.

Scaprim, the French subsidiary of TwentyTwo Real Estate, has been the asset manager and property manager of Officiis Properties since July 2015 when the portfolio was 56% occupied.

TwentyTwo Real Estate sells office property Optima

The fully-let office asset, initially acquired through distressed debt, was sold today to Primonial REIM

TwentyTwo Real Estate is pleased to announce it has sold Optima, a 12,500 sqm office building located in Ivry-Sur-Seine, to Primonial REIM (acting on behalf of one of its funds).

TwentyTwo Real Estate acquired Optima through the purchase in 2014 of a non-performing loan backed by the property, followed by a loan-to-asset swap the next year.

The active asset management strategy carried out by TwentyTwo Real Estate led to the leasing of 9,100 sqm in less than 24 months, eventually taking the property to full occupancy (from 25% occupancy at acquisition) with blue-chip tenants including FNAC, Banque Populaire, Agfa and Suez.

CORELOG reaches full occupancy and makes add-on acquisition

CORELOG, the logistics vehicle of TwentyTwo Real Estate, reached 100% occupancy in July 2017 and acquired a 40,000 sqm logistics asset near Lyon in August 2017

CORELOG leased up the Vatry and Clésud assets to 3PL operators C’Log (Groupe Beaumanoir) and Dachser, taking the portfolio to full occupancy (vs. 25% vacancy at acquisition).

In addition, CORELOG acquired in August 2017 a 40,000 sqm warehouse near Lyon from French listed company ICADE.

The asset, located in the industrial park of Saint-Quentin-Fallavier on the French North-South logistics corridor, is comprised of three separate buildings with a combined occupancy rate of 76%.

CORELOG’s portfolio now consists of seven logistics and industrial properties totalling 170,000 sqm, with a blended occupancy rate of 94%.

CORELOG is an OPPCI (French private REIT) dedicated to investing in logistics assets located in established industrial parks in France. CORELOG is managed by Scaprim REIM, an investment and fund management company accredited by the French Financial Markets authority and subsidiary of TwentyTwo Real Estate.

TwentyTwo Real Estate refinances office property Optima

The property, initially acquired through distressed debt, has been refinanced with a senior mortgage facility provided by French bank BRED

TwentyTwo Real Estate (“the Company”) is pleased to announce the refinancing of French office property “Optima”, located in Ivry-sur-Seine, France, which is managed by the Company.

In May 2014, TwentyTwo Credit I, an investment vehicle managed by the Company, acquired a non-performing mortgage loan secured by the c. 13,000 sqm Optima office property. In April 2015, the property was acquired following a loan-to -asset swap through a dedicated entity managed by the Company.

Following active asset management which increased occupancy, the Company partially refinanced the property by securing a €15 million senior mortgage facility provided by French bank BRED.

Daniel Rigny, founder of TwentyTwo Real Estate commented:

“This successful turnaround exemplifies our capability to quickly resolve distressed debt situations and improve property value through active asset management.”

TwentyTwo Credit I completes a third investment

TwentyTwo Credit I, an investment vehicle targeting European real estate investment opportunities in distressed debt, mezzanine and preferred equity has invested in a mezzanine loan secured by a portfolio of leisure parks

TwentyTwo Real Estate (“the Company”) is pleased to announce that TwentyTwo Credit I, an investment vehicle managed by the Company, has purchased part of a mezzanine loan with a total face value of circa €200 million.

The loan is secured by a portfolio of 7 leisure parks located across the Netherlands, Belgium and Germany.
Daniel Rigny, founder of TwentyTwo Real Estate said: “The leisure sector has proved remarkably resilient over the past couple of years despite the macroeconomic uncertainties.

This investment is consistent with our credit strategy of making real estate investments benefiting from robust capital protection and attractive return expectations”.

TwentyTwo Credit I successfully realizes mezzanine investment

The mezzanine bond financing granted by TwentyTwo Credit I to CODIC group has been fully refinanced following practical completion of the Resonance property

TwentyTwo Real Estate (“the Company”) is pleased to announce that Resonance, a 24,000 sqm office property located in Bagneux, France was delivered in June 2016 by Belgium developer CODIC.

The quality of the property and its letting status enabled CODIC to refinance the property with a new senior mortgage facility, fully repaying the €24 million mezzanine financing granted in July 2014 by TwentyTwo Credit I, an investment vehicle managed by the Company.

Daniel Rigny, founder of TwentyTwo Real Estate said:

“This investment illustrates the capacity of TwentyTwo Real Estate to source, execute and deliver attractive real estate investments. We are pleased to have supported CODIC in its landmark development project, the first office building to be delivered as part of the Grand Paris Express program.”

CORELOG, the logistics vehicle of TwentyTwo Real Estate expands its portfolio

CORELOG, an OPPCI (French private REIT) dedicated to investments in logistic and industrial properties, has completed the purchase of a warehouse located in the industrial park of Clésud, Miramas (13) for €4.8 million.

The vacant property comprises 12,500 square meters of gross floor area with the potential to develop a further 6,000 square meters. TwentyTwo Real Estate, via its asset manager Scaprim Services, plans to perform a light refurbishment of the property prior to marketing it for letting.

The acquisition fits within CORELOG’s strategy of acquiring good quality logistics platforms located in established industrial parks on the North-South French logistic axis.

Pursuant to this acquisition, CORELOG’s portfolio consists of 6 logistic and industrial properties totalling €47 million.