Simon DeBartolo Group, the giant US retail REIT, is moving into Europe by agreeing to take a 44% stake in French shopping centre developer and manager Groupe BEG.
The trust’s $80m acquisition is a joint venture with Argo II, an investment fund established by J P Morgan and New York-based private property investment company The O’Connor group; and Harvard Private Capital Group, another private US fund. The deal is structured so that the partners will eventually take a controlling interest in the Paris-based firm.
Simon DeBartolo chief executive David Simon said the group was expanding into Europe to take advantage of the continent’s strong property market and to provide its existing US tenants with opportunities to open units abroad.
The acquisition gives Simon DeBartolo, already the larges public real estate company in the US with 1997 profits of $203m,an opportunity to develop retail property throughout Eastern and Western Europe. Simon added that the $80m cash injection, which will be made over the next 12-18 months, will be used to build in France, Italy, Portugal, Turkey, Spain and Poland.
Since Groupe BEG was founded in 1964 the engineering, development and management company has built and sold almost 3m m2 including 250 shopping centres and hypermarkets.
