Société Foncière Lyonnaise, the French property company controlled by Commercial Union with Hermes and Grosvenor Estate as significant shareholders, has bought a FFr2.8bn portfolio of Parisian investment properties and a development site.
The purchases, which are being funded with a FFr2.4bn issue of convertible bonds and new shares, will make SFL one of the leading property companies in France.
After full conversion, Commercial Union, Hermes and Grosvenor Estate will have diluted their holdings to 32%, 12% and 5% respectively, increasing the liquidity of the quoted shares.
The package being acquired contains majority interests in five prime mixed-use buildings in central Paris, which are being bought from French insurer GAN for FFr767m.
In addition, SFL is buying Edouard VII, a prime development site near the Paris Opera from Societe Generale for FFr2.1bn. The 55,000m2 (590,000 sq ft) mixed-use project is due to finish at the end of next year.
After the acquisitions, SFL will have an FFr8.9bn portfolio of Parisian properties.
