Target Information

Alantra’s Real Estate Debt Fund has secured financing through a Sustainable Bond for the repositioning of a prime real estate asset situated in the heart of Paris, just 50 meters from the renowned Champs-Élysées. This financing is part of a larger initiative to refurbish and manage the property, which will soon operate as a Flex Living residence under Sonder, a prominent American management company in the sector.

The building's repositioning aims to achieve the BREEAM Excellent certification, reflecting the highest environmental standards. It is owned and managed by Alexandre Bibas and his partners, a coalition of French investors focusing on asset repositioning in Paris under the Delta Reim group, which emphasizes sustainable development and innovation across various high-potential projects.

Industry Overview in France

The real estate market in France, particularly in Paris, has shown resilience even amid economic uncertainties. The demand for innovative housing solutions, such as Flex Living, is on the rise, attributed to changing consumer preferences and increased urbanization. This trend is driving the need for more service-oriented accommodation that meets evolving lifestyle demands.

Furthermore, regulations mandating higher environmental standards for buildings have prompted developers to adapt their approaches toward sustainability. Stakeholders in the industry are increasingly focusing on green certifications, which not only enhance the asset's value but also attract environmentally conscious tenants.

As cities evolve, the French real estate sector is witnessing a shift towards mixed-use developments that integrate living spaces with commercial and leisure facilities, catering to a diverse demographic. This adaptability allows stakeholders to maximize asset utilization and profitability.

The growth in Flex Living residences is particularly notable, as they offer flexible accommodation options that align with modern urban lifestyles. This sector is poised for continued expansion given Paris's strategic position as a global city attracting both residents and international investors.

Rationale Behind the Deal

This investment is a strategic response to the growing demand for sustainable and flexible living options in urban centers. Alantra’s financing will not only facilitate the refurbishment of the asset but also ensure compliance with evolving environmental standards, positioning the property well in the competitive Parisian market.

Additionally, the selection of Sonder as the managing operator underscores the focus on integrating high-quality service and operational expertise, further enhancing the asset’s appeal and potential for long-term value accretion.

Investor Information

Alantra is an independent global mid-market financial services firm recognized for its proactive role in private debt, particularly in Southern Europe. With over €2 billion deployed across five countries, Alantra's Real Estate Debt strategy includes a diverse range of asset classes such as logistics, hotels, and educational real estate.

By leveraging its extensive network and expertise, Alantra aims to provide long-term flexible financing solutions that cater to the evolving needs of the real estate sector. Their partnership with Indigo Capital enhances their capacity to offer alternative financing solutions, illustrating their commitment to expansion beyond traditional markets.

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This deal represents a promising investment, primarily due to its prime location and alignment with market trends favoring sustainable living solutions. The Parisian real estate market’s focus on Flex Living positions it at the intersection of demand and innovation, potentially leading to robust occupancy rates and rental yields.

Moreover, by engaging in a long-term financing structure through a Sustainable Bond, Alantra is not only committing financially but is also contributing to a broader objective of enhancing environmental sustainability within the urban fabric. Such initiatives could resonate well with socially responsible investors.

In summary, the combination of a reputable managing partner like Sonder, a well-located asset, and the growing demand for sustainable living solutions makes this transaction a notable step in Alantra's investment portfolio. If executed effectively, this deal could yield significant returns while contributing positively to the urban landscape of Paris.

Overall, through this investment, Alantra reinforces its position as a leading player in the mid-market private debt space, showcasing its ability to adapt and seize opportunities in a rapidly changing real estate environment.

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