Saturday 24 February 2018

Oxford Properties turns focus to Paris

The Royal Exchange Building in London
The Royal Exchange Building in London

Katia Dimitrieva

Oxford Properties Group, the real estate arm of the Ontario Municipal Employees Retirement System, is seeking to invest in high-end Paris retail properties as demand increases for brands such as Hermes and Breitling.

The company has visited a few of Paris's best-known luxury districts and wants to find an investment opportunity, following two high-end retail deals in London two years ago, according to Paul Brundage, Oxford's head of European strategy.

"It's a rental growth story because of the demand these global luxury retailers have to get their brand on these very specific streets,"

Brundage, executive vice president and senior managing director for Europe at Oxford, said in a telephone interview Wednesday. In Paris, "we've spent some time trying to understand those and looked at a couple of opportunities there.

"Hopefully we'll be able to find something there."

Oxford wants to build out its luxury retail property holdings as tenant demand for space outstrips the limited supply.

The investor, which established its London office in 2008, is seeking to benefit from rising rents.

The average annual rent on Paris's Avenue Montaigne, lined with retailers including Chanel and Dior, jumped 10pc last year to $951 a square foot, according to brokerage Cushman & Wakefield Inc.

In 2013, Oxford purchased its first luxury retail property in Europe, London's Royal Exchange, home to such tenants as Hermes and Tiffany & Co.

The following year, it bought a stake in a strip of retail and office space on New Bond Street in London, one of the world's 10 most expensive streets, where shoppers can buy watches at Breitling or a $2,000 Belstaff leather jacket designed by David Beckham.

In Paris, luxury shopping strips include Avenue Montaigne and Rue du Faubourg Saint-Honore, which has a Lanvin store among embassies and hotels.

Brundage declined to name specific sites the company has visited or may consider for an investment.

Oxford manages about C$31 billion (€24bn) in offices, apartment buildings, retail properties and other real estate for the Ontario pension fund. (Bloomberg)

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