Goldman Sachs has teamed up with Martin Myers and Miles D’Arcy-Irvine to buy in Paris. Michael Rowe reports.
French financial conglomerate Groupe Suez has sold a portfolio of property-related loans and real estate assets, with a book value of FFr 745m, to a US-backed consortium at a discount of nearly 50%.
Whitehall Street Real Estate, a $1bn fund managed and majority-owned by Goldman Sachs, is heading a joint venture that includes Shaftesbury International Holdings and Vines Management. The consortium brings together two of the best-known British developers of the 1980s, Miles D’Arcy-Irvine, who heads up Shaftesbury International SA, and Imry’s Martin Myers, the creator of Vines Management Ltd.
The property component is about 30% of the FFr 745m book value. There are a number of prize assets, including a well-let office and retail property in the eighth arrondissement, valued at around FFr 170m. The loan portfolio consists entirely of loans made to developers and marchands de biens, of which around a quarter are considered to be performing.
Richard Ellis and Féau advised the purchasers while Suez was advised by Bankers Trust.
The deal is the second time a US-backed fund has bought French property loans; at the end of last year, Cargill Financial Services Corporation and Lehman Brothers teamed up with LaSalle Partners to buy loans worth FFr 870m from Barclays Bank in Paris.
Suez made losses in the first half of 1995 of FFr 4bn, almost entirely as a result of provisions against its property portfolio.
The deal will only go a short way towards solving Suez’s property problems, however. The group estimates its exposure to the sector at FFr 15bn.
It recently announced a restructuring that will take it out of property lending and development, as it sells off its remaining property assets over a six-year period.
The property holdings have been grouped into a separate company, Crédisuez, which will manage loan assets formerly held by Banque Indosuez, Compagnie Hypothécaire and Compagnie Foncière Internationale.
