November 30, 2022
Established in 2015 amidst a real estate market facing retail bashing, the MCF Urban Convenience fund aims to acquire assets located in urban areas of major French conurbations. The fund has demonstrated excellent resilience in terms of performance, with a total performance close to 10.0% per year for nearly 7 years (past performance is not indicative of future results).
A fund launched during a period of intense retail bashing
Invested in major French urban areas, MCF Urban Convenience has always focused on city outskirts that benefit from strong national or regional dynamism. As early as 2015, in a market where few players were positioning themselves in retail, MCF Urban Convenience concentrated on retail park assets, always very well located in the heart of dense urban areas, and whose land was destined to appreciate in value over time, according to the management team's analysis.
A counter-cyclical investment strategy, in-depth local knowledge, extremely selective sourcing, and acquisition risk premiums significantly higher than other asset classes: these were the ingredients that allowed MCF Urban Convenience to build, since 2015, a portfolio of over a hundred assets with a total value of nearly €400 million, and to generate an average total annual performance of 9.8%, of which 6.6% was distributed to the fund's investors on average. The management company specifies that past performance is not a reliable indicator of future performance and that this fund presents risks, particularly illiquidity and capital loss.
An active year 2022, despite an uncertain environment
In a real estate market lacking clear benchmarks, Mata Capital's teams focused in 2022 on crystallizing the value of the fund's assets, by pursuing a selective investment policy on the one hand, by carrying out significant asset management work on the other hand, and also by initiating the first divestments from the portfolio since 2015.
MCF Urban Convenience indeed continued its investment policy in this theme, primarily by finalizing operations initiated in 2021. For example, at the beginning of the year, Mata Capital acquired an Intersport portfolio of three stores located in Hauts de France through a Sale & Leaseback transaction, for a total amount of over €15 million. Furthermore, a firm 9-year lease was signed concurrently with this acquisition with Prosport, the portfolio seller and Intersport's leading franchisee in France. Other examples include the pre-summer acquisitions of a retail park of over 10,000 m² in one of Brittany's prime commercial areas for a total amount of over €20 million, and a retail park on the outskirts of Lyon for nearly €10 million. “These operations perfectly align with the DNA of the MCF Urban Convenience fund, namely positioning in dynamic regions and land with potential in dense urban areas,” explains Laurent Delautre, co-founder of Mata Capital, and Head of Transactions & Asset Management for retail assets.
Thanks to the strengthening of its teams in Paris and Lyon in 2022, notably with the recruitment of Quentin Fournier – formerly of URW – as Director, dynamic asset management work was also carried out throughout the year to protect the fund's performance. This work now allows for a financial occupancy rate of 99.3%, to target a distribution to investors exceeding 6.0%, as well as a slight revaluation of assets at the end of December 2022 (this is an estimate of future performance based on current market conditions, and does not constitute an exact indicator).
Finally, the very first divestments from MCF Urban Convenience were initiated during the second half of the year and are expected to materialize in the coming months, thus demonstrating the fund's liquidity and the teams' ability to crystallize value creation from certain mature assets in the portfolio.
Building on its 2022 strategy, MCF Urban Convenience will focus in 2023 on the dynamic management of its real estate portfolio and the pursuit of value creation, while remaining opportunistic in the urban retail and logistics market segment.