Fidelity’s real estate business makes in-roads into France

Fidelity International's move into the commercial property market continues to gather pace with the announcement today of the first French purchase for it's recently launched Pan-European Real Estate Fund.

The new acquisition, a 22,000 m² logistic development in St Rambert, to the south of Lyon, was purchased for €12.4 million. The purchase reflects a yield of 7.6% and the building will be completed in December 2008. The vendor and developer is the Lyon-based Cardinal Investissement. A second acquisition of a logistic development in France will be announced shortly.

Commenting on the first French acquisition, Keith Sutton, Director of European Real Estate at Fidelity International said: "We selected the investment at St Rambert because we believe that the area around Chanas and St Rambert will become a logical and sought after extension of the Lyon logistics market - new planning consents at L'Isle d'Abeau and close to Lyon airport are now very difficult to obtain. We also have a strong local development partner in Cardinal Investissement, who have a reputation for high-quality product and will be actively involved in the letting of the building.

Keith Sutton continued: "We see potential in the logistics sector to create not just solid cash-flow returns but also capital value for our clients. The consolidation among operators, the changing demands on location and network infrastructure and even the rising cost of fuel for transport present opportunities for investors. We believe our approach to stock selection and risk management - key parts of our underwriting within the Fidelity Real Estate team- mean that we can identify these opportunities."

Cap Performance and Orrick acted as advisers to Fidelity International Real Estate team on the acquisition.

The new property acquired in St Rambert is the latest acquisition in an on-going programme to create a Pan-European portfolio. Further purchases are expected to be announced shortly.

FIL Limited and its subsidiary companies serve the major markets of the world by providing investment products and services to individuals and institutional investors outside the US. FIL Limited manages a total of £130.4 billion of assets.