Bail Investissement

News

28 April 2000

The company is moving away from its traditional credit bail business, and investing in the infrastructure for e-business

French property company Bail Investissement is carrying out a major sales and investments programme. The aim is to increase the percentage of the company’s portfolio devoted to warehousing, logistics and retail property holdings, and to dispose of non-strategic and less profitable properties.

In 1999, BI bought properties worth €84.4m (FFR554m) in the Paris region. In February this year, the company purchased a smaller French property business, Codétour, at a price of €51m (FFr334m).

Codétour will be merged into BI in the first half of the current year. In the course of 1999, BI and Codétour together sold off a total of 11 holdings worth some €10m (FFr65.6m), realising capital gains of €3.6m (FFr23.6).

BI plans to sell holdings worth €61m (FFr400m). The properties represent 47% of the company’s total holdings in volume, but a mere 10% in terms of value. Between January and March 2000, BI signed sales agreements covering 15 buildings worth €10m (FFr 65.6m).

BI’s original activity was credit bail lease financing. The principal shareholder in BI is the French Groupe ISM, which owns 24.17% of the total equity. The Axa insurance group owns 14.64% of the shares, and Templeton 5.94%. The remainder (55.7%) are in the hands of the public.

In September 1998, ISM was acquired by a group of North American investors including Bankers Trust, which was later bought by Deutsche Bank. ISM is now owned by Deutsche and GE Capital, both of which are pursuing active property strategies in France. How far and in what way this may influence BI’s strategies remains to be seen.

The uncertain situation created by the ISM acquisition initially led BI to reduce its purchases and disposals activities. This meant that the company was relatively inactive in the markets at a time when many other French property companies were expanding their portfolios, particularly with office acquisitions.

BI is active and says it has decided to purchase warehouses and logistics centres as a priority, because they deliver higher rental returns than other property holdings. The company believes that growth in e-business and internet use in France will bring about a revolution in distribution strategies, creating new demand for well-situated logistics centres.

According to BI chairman Jean-Claude Bossez, the company is negotiating the purchase of several holdings from ISM. These include a major warehousing complex in the north west of the Paris region, offices in Paris city (Place d’Italie) and a shopping centre in south east France.

BI owns a total property portfolio of some 601,540m2, with a market value independently estimated at €706m (FFr4,63bn). Just more than half of these holdings in volume terms are in the Paris region, excluding Paris itself, 9% in central Paris, 31% in the French provinces, and 8% outside France (UK and Spain).

Nearly half the space is warehouses and light industrial premises, 27% retail, 23% offices, and 4% hotels. The company intends to maintain its current foreign holdings, but its new investments will be made solely in France.

Consolidated figures – Bail Investissement plus Codétour

	ALIGN=”CENTER”>1999		ALIGN=”CENTER”>1998
	€m	FFrm	€m	FFrm
Property rental income	59.4	390	55.0	361
Finance lease income	57.1	375	65.6	430
Net profit	30.1	394	26.3	173

Bail Investissement
Grand Ecran, 30 Place d’Italie
75013 Paris
Tel 33 1 4078 5252
Fax 33 1 4078 5353

The company is moving away from its traditional credit bail business, and investing in the infrastructure for e-business French property company Bail Investissement is carrying out a major sales and investments programme. The aim is to increase the percentage of the company’s portfolio devoted to warehousing, logistics and retail property holdings, and to dispose of non-strategic and less profitable properties. In 1999, BI bought properties worth €84.4m (FFR554m) in the Paris region. In February this year, the company purchased a smaller French property business, Codétour, at a price of €51m (FFr334m). Codétour will be merged into BI in the first half of the current year. In the course of 1999, BI and Codétour together sold off a total of 11 holdings worth some €10m (FFr65.6m), realising capital gains of €3.6m (FFr23.6). BI plans to sell holdings worth €61m (FFr400m). The properties represent 47% of the company’s total holdings in volume, but a mere 10% in terms of value. Between January and March 2000, BI signed sales agreements covering 15 buildings worth €10m (FFr 65.6m). BI’s original activity was credit bail lease financing. The principal shareholder in BI is the French Groupe ISM, which owns 24.17% of the total equity. The Axa insurance group owns 14.64% of the shares, and Templeton 5.94%. The remainder (55.7%) are in the hands of the public. In September 1998, ISM was acquired by a group of North American investors including Bankers Trust, which was later bought by Deutsche Bank. ISM is now owned by Deutsche and GE Capital, both of which are pursuing active property strategies in France. How far and in what way this may influence BI’s strategies remains to be seen. The uncertain situation created by the ISM acquisition initially led BI to reduce its purchases and disposals activities. This meant that the company was relatively inactive in the markets at a time when many other French property companies were expanding their portfolios, particularly with office acquisitions. BI is active and says it has decided to purchase warehouses and logistics centres as a priority, because they deliver higher rental returns than other property holdings. The company believes that growth in e-business and internet use in France will bring about a revolution in distribution strategies, creating new demand for well-situated logistics centres. According to BI chairman Jean-Claude Bossez, the company is negotiating the purchase of several holdings from ISM. These include a major warehousing complex in the north west of the Paris region, offices in Paris city (Place d’Italie) and a shopping centre in south east France. BI owns a total property portfolio of some 601,540m2, with a market value independently estimated at €706m (FFr4,63bn). Just more than half of these holdings in volume terms are in the Paris region, excluding Paris itself, 9% in central Paris, 31% in the French provinces, and 8% outside France (UK and Spain). Nearly half the space is warehouses and light industrial premises, 27% retail, 23% offices, and 4% hotels. The company intends to maintain its current foreign holdings, but its new investments will be made solely in France. Consolidated figures – Bail Investissement plus Codétour ALIGN=”CENTER”>1999 ALIGN=”CENTER”>1998 €m FFrm €m FFrm Property rental income 59.4 390 55.0 361 Finance lease income 57.1 375 65.6 430 Net profit 30.1 394 26.3 173 Bail Investissement Grand Ecran, 30 Place d’Italie 75013 Paris Tel 33 1 4078 5252 Fax 33 1 4078 5353