Tokoro Capital makes first acquisition with off market purchase of Paris CBD office building
Tokoro Capital, a next generation real estate investment manager set up by Sanjay Sethi and Max Bassadone, has acquired 86 Rue De Courcelles, an office building in a prime location in the iconic 8th Arrondissement of Paris, from a JV between Angelo Gordon and S2i Partners.
The property is currently vacant following a major refurbishment, with Tokoro Capital having already begun to sound out potential interested occupiers.
The off market acquisition is the first made by Tokoro Capital since it launched in April 2020 having closed its maiden Fund, TKO-I LP with c. EUR250 million of investable capital, assuming leverage. It is targeting office opportunities in the EUR20 million to EUR100 million value range with an initial focus on Paris and London, Europe’s two most liquid and transparent real estate markets, but will consider assets in other European gateway cities.
Formerly a Hotel Particulier dating back to c1864, the recent refurbishment included a new roof, windows, internal stairwell and amends to the internal floorplates, delivering c1,100 sq m of best in class Grade-A office space, across four floors behind a carefully restored external façade. Following signficant landscaping and external works, the building also benefits from an abundance of outside space including an 86 sqm terrace on the second floor and 110 sq m courtyard.
The property is designed to achieve a BREEAM ‘Very Good’ rating and is in an outstanding freehold location in the 8th Arrondissement, Paris’ main commercial sub market which is home to more than 33,000 businesses. Less than 200 metres from Parc Monceau, one of Paris’ premier parks, the property is ideally located a short walk from Charles de Gaulle–Étoile metro station which is beneath the Arc De Triomphe and connects directly to both Charles De Gaulle and Orly airports.
Tokoro believes that the recent renovation positions the office to benefit from the favourable long term Paris CBD office market characteristics. Whilst a short term pause in take up as a result of Covid-19 is forecast to lead to a small increase in what were historically low vacancy rates, a deficit of available investment grade stock and tenant demand for Covid-proof buildings will support both income and capital value growth over the longer term.
Max Bassadone, Co-Founding Partner at Tokoro Capital, says: “This acquisition presents a rare opportunity to invest in a prime central Paris location that fits with our strategy as active managers able to generate yield pick up even in lower risk investments.”
Sanjay Sethi, Co-Founding Partner at Tokoro Capital, adds: “The future of the office points towards beautiful touchdown spaces offering a carefully curated mix of indoor and outdoor space, which is exactly what 86 Rue De Courcelles offers. As we see tenants re-evaluating how to occupy the office going forward, we see smaller buildings having an even greater reach in terms of tenant demand. This, coupled with the current appeal to tenants of low rise versus high rise buildings, has led to us already seeing strong interest from a range of tenants.”
Tokoro was advised by Goodwin Proctor, CC Notaires, PWC and JLL.
AG/S2i were advised by Lacourte Raquin Tatar, Allez & Associés Notaires and Deloitte.