constructa

The Paris-based property services group is planning to expand development on its own account. Originally founded in 1965 in Marseille as a subsidiary of a French development corporation, property company Constructa – now based in Paris – today engages in a wide range of real estate-related activities. These include asset and property management, advisory services, brokerage, and real estate development. International expansion has formed an important part of Constructa’s strategy since 1986, when the company’s first foreign subsidiary was established in Miama, Florida. Constructa is currently one of the few French property groups that earns more than 50% of its revenues outside France, with the US alone accounting for 35% of its worldwide earnings. The company is also active in Portugal, Switzerland and London. This turnaround is essentially due to Constructa’s chairman and chief executive, Mark Pietri, who also controls some 80% of the group’s shares. Most of the remaining 20% is owned by three large French institutions – the Compagnie Générale des Eaux, Axa and BNP. Constructa initially hired Pietri as a senior vice president in 1973, and he bought the company in 1986. To date, Constructa has acted largely on behalf of clients across its range of activities, rather than for its own account. It has developed a speciality of supporting big US investors in their sorties into Europe, and European investors when they go to the United States. Marc Pietri is keen to buttress this position by building up a property portfolio for Constructa as a long-term holding and source of revenues. He acknowledges that to do this the company will need to act in concert with outside partners, since Constructa does not by itself have a sufficiently large capital base for major investments of this type. Constructa made its first move towards this objective three years ago by setting up a special department to buy distressed property-linked debt portfolios. The department is currently studying six debt portfolios situated in France, Spain and Switzerland. In August 1997 Constructa joined forces with Morgan Stanley to buy property assets from Bati Crédit and Brixel, (the defeasance structures of the GAN insurance group) for FFr 675m. The purchase comprises 75 properties spread out across France, which will be managed by Constructa. In 1997 Constructa US joined forces with the Brazil-Invest financial group to form Constructa de Latina America. Its first operation was a contract with the town of Sao Paolo concerning the reorganisation and centralisation of administrative services. Constructa operates some 50 regional units and 19 permanent offices around the world, and it is currently managing around 60 development projects. The group employs a total permanent staff of 150. Development activities for clients, studies and assets management constitute half of Constructa’s overall activity. Marketing and broking account for a further 40%, property management 10 % and major sales to investors 4%. ($m) 1996 assets under management 1,200 asset sales 160 turnover 20 net profit 0.68 Constructa 73 rue de Miromesnil 75008 Paris tel +33 1 53 42 46 48 fax +33 1 42 93 96 21