The Asset is located in Cesson-Sévigné in the suburbs of Rennes, the administrative capital of the region of Brittany, in France. The conurbation of Rennes Metropole encompasses 37 districts with a total of more than 400,000 inhabitants. The site is part of Rennes Atlante zone, which is dedicated to start up companies from electronics, information and communication technologies sectors. The area immediately surrounding the site consists primarily of office, research and IT facilities. There is also some residential properties.

Key Statistics

Floor Area 20,380m2
No. of Tenants 1
Passing Gross Rent per Year €850,000
Rent per occupied m2 pa 76
Void Rate 45%

Asset Overview

  • The Asset is a 20,380m2, custom-built, light industrial and office complex.
  • The total area of the site is c. 53,500m2.
  • The Asset was previously fully let to Technicolor and their subtenant (and former subsidiary) TVN, for an annual rent of €1,580,803.

Key Management Issues at Purchase

  • Technicolor served notice to break their lease with effect from 18 December 2012.
  • The site’s highest value is as land for redevelopment. The site will form a critical part of an urban redevelopment zone (“ZAC”) allowing for higher density, mixed use development and involving new infrastructure such as a metro extension which will directly serve the site.
  • The conditions for development are governed by the metropolitan planning authority, Rennes Métropole, which has significant influence in setting these parameters and can therefore effectively control the economics of the project.

Progress since purchase

  • Following extensive negotiations, Technicolor made a dilapidations payment of €1.15 million and they remained liable for any environmental contamination in relation to the use of the site.
  • A new direct lease was signed with TVN that took effect from 19 December 2012. The lease covers 55% of the area of the whole complex and was for a 2-year fixed term, while they await the completion of a new development in another location. The rent is €850,000 per annum.
  • After intensive negotiations with the local authorities over 9 months to maximise land values, Rynda sold the site to a regional development consortium at a net vendor price of €16,000,000. The sum of the net vendor price and the dilapidations indemnity paid by Technicolor represents a 17% premium to the last valuation of the asset.

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