This is a first. At least for a national heritage building. The French government has signed a concession contract with the Duval Group to refurbish the Cercle National des Armées without spending a single euro. The contract covers a complex known as "Pépinière 2". It comprises the famous Place Saint-Augustin building, which houses the CNA on 12,500 m² of floor space, and another office building at 24-28 rue de la Pépinière, with the same floor space.
Inaugurated in 1928, the Cercle National des Armées, also known as the "Maison des Officiers", is to undergo the most extensive works in its history, at no cost to the Ministry of the Armed Forces, "to make it an efficient and more sustainable building", while preserving its heritage character and ensuring continuity of operation during the works phase.
Groupe Duval will operate all the commercial premises at the foot of the building, including both Place Saint-Augustin and the Rue de la Pépinière apartment building, representing a total floor area of 9,000 m². The CNA's hotel, catering and events activities continue to be operated by Eurest under a public service delegation agreement.
" These upkeep and maintenance obligations will enable the Ministry to recover a real-estate asset in 2054 that is in excellent condition and compliant with tertiary decree regulations in terms of reduced energy consumption", explains Étienne Caudy, the project director for the DTIE (Direction des territoires, de l'immobilier et de l'environnement).
The financing of the work, upkeep and maintenance of the NAC will be entirely borne by the Duval Group, which will pay an annual fee to the Ministry. In detail, during the first four years of the contract, the concessionaire will carry out studies and renovation work for a total initial investment of around €50 million (€43 million for the CNA, €7 million for the Rue de la Pépinière office building). The Ministry will also receive a fixed fee of €405,000 over four years, then €105,000 per year, as well as a variable fee based on the concessionaire's sales (10% from the €5 million threshold).
The concession contract for the Cercle National des Armées sets a precedent in State property management. "This century-old building is the basis for a highly modern approach to the contractual, financial and legal techniques we will be implementing over the next 30 years. This is the first time that the French State, with a partner like Groupe Duval, has organized the in-depth regeneration of such an emblematic asset using a contractual formula - the concession - which sets a precedent", emphasized Christophe Mauriet, Secretary General for Administration. "This project illustrates the State's new approach to real estate management, which aims to move from a cost center to a profit center, by turning to the market for real estate development projects, thus enabling financing to be entirely self-supporting by the economic operator", adds Étienne Caudy.