Just a few hours ago, Iroko Zen made its third acquisition in London, "where we never thought we'd be able to make a name for ourselves", admits Gautier Delabrousse-Mayoux, co-founder and CEO of Iroko. It's a place where the directors of an SCPI whose assets now exceed €1.1 billion already have their customs...
It was in the trendy Shoreditch district, on Redchurch Street to be precise, between numbers 15 and 29, that it signed four high street retail units leased to four ready-to-wear brands (APC, Reformation, Urban – Free People and Studio Nicholson), increasing their London footprint by £6.02 million, representing a yield of 7.35%.
"A very fine operation", said Marion Bertrand, head of investment at Iroko, crossing her fingers as she spoke of closing the deal to sister publication Business Immo at the beginning of June.
To tell the truth, Iroko Zen's three London signings all have a "little something extra", according to Delabrousse-Mayoux who, in the space of 24 hours, transformed himself into a tour guide for a handful of journalists.
Here, to unveil 164 Bishopsgate, 4,550 square metres in the City, acquired for €31.26 ,illion and a 7.3% yield. There, to show 90 Union Street, 1,656 square metres, for which the SCPI deployed € 17.01million based on a 7.44% yield. "We never thought we'd have access to these assets, which historically trade at 5.5%," he says. "But the timing was right: it was the sales season. And as we have a culture of negotiation..."
And the interested party takes as an example 164 Bishopsgate, overlooking Liverpool Street, acquired in 2019 by British Land Company "at 4.8%", information confirmed by CoStar data. "That says it all," he adds.
"This market has always attracted international investors," Bertrand points out. "Only, the Brexit and Covid-19 have meant that the list of investors has shrunk considerably. Our advantage today? Being able to execute deals on time, debt-free, which is likely to appeal to sellers who sometimes have their backs against the wall."
Sellers who have often given up on their initial expectations in terms of exit... "... If we don't get the rate we want, we don't do it", says Charles Duclert, co-founder of Iroko and master of real estate at the management company. In other words, if it's not higher than 7%, or even 7.3%, Iroko Zen won't position itself.
"See the cranes in the sky?
"Today, for us, the hardest thing is not finding operations, but having the time to filter them," Marion Bertrand points out. "In the UK, we see 40 a week. "Here, everything moves faster," adds Gautier Delabrousse-Mayoux, who is banking on profitability to offset the risk of fluctuations in the pound sterling.
Together, with Pierre-Antoine Burgala, CEO and partner of Iroko, as witness, they put into words the strategy adopted on the banks of the Thames; a "granular" and "opportunistic" strategy, sums up Charles Duclert.
Offices and shops at 164 Bishopsgate, where the Tesco supermarket, in place since 1998, is still committed for almost nine years - this represents 56% of rents -; offices at 90 Union Street, where Sonnedix UK Services Limited continues to grow and where rents are "attractive", between £60 and £75/sqm; shops, now, on the Shoreditch side, "where flows are guaranteed", assures Marion Bertrand.
" With our multi-thematic positioning, we're opening up the field of possibilities", sums up Gautier Delabrousse-Mayoux, who says he took on "a lot of debt" at the beginning of the year "to seize opportunities", before "the window of opportunity closed". "We have to be honest: today, we're more comfortable going to a city like London than anywhere else. The vacancy rate there is quite low, especially for Grade A assets." He adds: "Look at the cranes in the sky. Here, they have the facility to eliminate obsolete stock. So we have to keep our buildings at the cutting edge of user requirements..."