May 25, 2020
The Atrium project was launched in the Rennes metropolitan area by Mata Capital in December 2016. The goal was to develop 8,000 sqm of speculative office space, with the objective of leasing the areas during construction, then selling the built and leased property to a long-term investor.
On April 24, 2020, we signed the deed of sale for the Atrium property complex with La Française Real Estate Managers (a subsidiary of La Française Group). Mata Capital's teams thus finalize their third value-added transaction.
Investment Strategy
We developed the investment strategy based on the following convictions:
Project Timeline
June 2017
On December 21, 2016, we acquired a development plot in the peripheral "Rennes-East" sector, the main business district of the metropolitan area, to develop an office complex comprising 3 buildings. For this operation, we had set an investment horizon of 3-4 years, with a sale to be conducted through a tender process involving institutional investors. The project's viability and the realization of the business plan relied on opportune investment choices, as well as a proactive management approach, which is Mata Capital's hallmark.
A Promising Location with High Potential
Located at 2 rue Claude Chappe in Cesson-Sévigné, the Atrium building is situated within the VIASILVA urban development project, which received the ÉcoCité label in 2009. It was therefore in an area with high potential that we decided to invest. The opening of a high-speed rail (LGV) line from 2017, connecting Paris in 1 hour 27 minutes, and a new metro line scheduled to open in mid-2021, promise to enhance the sector's attractiveness. The area had already attracted several companies from the New Information and Communication Technologies (NICT) sector. The combination of increased accessibility and strong user demand for new office buildings thus offers excellent market prospects, further strengthened by an anticipated shortage of supply in this sector.
A Well-Thought-Out Business Plan
In parallel with the land acquisition, we entrusted the building's construction to a group of local property developers renowned for their expertise (Jeulin Immobilier and Fimoren), framing the cost of works and the completion deadline with a Property Development Contract. The Atrium building, designed by the Barré-Lambot architectural firm, boasts high-quality architectural features and RT2012 – 20% certification, meaning an environmental footprint 20% lower than thermal regulations require. The timing of the operation was optimal, with work commencing as soon as the land was acquired, allowing for the building's delivery ahead of potential competitors.
Mata Capital's investment committee approved this €14.5 million investment (land + construction) in 2016 based on the following target performances: an IRR of 14.4% and a multiple of 1.35, derived from a conservative business plan, achieved by executing the operation in two phases and setting target rents (€160/sqm) below market values.
A Business Plan Enhanced by Dynamic Management
Prior to and throughout its construction, the project was enhanced through a detailed analysis by our technical team: the floor areas were optimized, and the quality and performance of materials were improved, all while adhering to the initial construction budget. Like all projects undertaken by Mata Capital, we focused on users' expectations and needs to offer them the ideal product.
Regarding the leasing strategy, we commissioned local and national real estate agents to ensure a strong marketing drive. This approach allowed us to achieve a higher rent than targeted in our business plan (€166/sqm versus €160/sqm) and the signing of leases with leading companies such as Regus, Solocal, Ausy, and Conserto for 94% of the space by summer 2019, six months before the delivery of the second phase.
Upon delivery of the building (April 2020), the investment generates an annual rent of €1.3 million, representing a yield of 9.0% (net of acquisition costs) on the investment made.
Completion of the Transaction in April 2020 with the Sale of the Building to La Française Real Estate Managers
In accordance with our business plan, we organized the sale of the building as soon as the leasing was finalized during Q2 2019.
This sale was organized as part of a tender process involving institutional investors. Four indicative offers were received, and a sales agreement was signed with the highest bidder after a second round, which allowed us to maximize the sale price and set a record with a yield of 5.2% (net of acquisition costs).
Following the delivery of the second phase and tenants taking occupancy in April 2020, the final deed of sale was formalized on April 24, 2020, with an SCPI managed by La Française Real Estate Managers.