Information on the Target

Abenex REIM executed a strategic divestment at the end of 2019 by selling a portfolio of 14 retail properties to Pierre Premier Gestion, acting on behalf of the OPPCI PPG RETAIL fund. This portfolio, primarily leased to the well-regarded Grand Frais brand, encompasses over 28,000 m² of retail space. Abenex acquired these assets in 2014 through a private sale process, aligning with the brand's growth and partner development over a five-year period.

Grand Frais, established in 1992, has risen to prominence in France's food retail sector, boasting more than 215 operational stores. The brand was voted the favorite among consumers in 2018, successfully organizing a diverse range of food professionals under one roof, including greengrocers, fishmongers, dairy product sellers, grocers, and butchers, emulating the vibrant atmosphere of a city center market.

Industry Overview in France

The retail sector in France is characterized by a dynamic landscape, with increasing consumer preference for specialty food markets like Grand Frais. This trend reflects a broader move towards quality over quantity, as consumers increasingly seek fresh, locally sourced products. The prominence of hypermarkets is gradually being challenged by smaller, specialty retailers that can provide a curated shopping experience and higher quality goods.

With a focus on sustainability and a growing interest in organic and local produce, retailers are adapting their offerings to satisfy consumer demands. The shift towards online shopping continues, but brick-and-mortar establishments remain pivotal, especially for perishable goods, where consumers value freshness and the tactile shopping experience.

In addition, the retail property market is benefitting from favorable investment conditions, with low vacancy rates in prime locations and rising demand for retail spaces that offer unique shopping experiences. Investors are increasingly targeting assets that align with these consumer preferences, particularly those that can provide stable cash flows from reputable tenants.

As evidenced by the success of Grand Frais, niche markets are thriving, and retail formats that combine quality offerings with a strong brand identity are well-positioned to capture market share. The landscape for retail properties is thus promising, making strategic acquisitions a relevant focus for investors.

The Rationale Behind the Deal

The sale of the retail property portfolio aligns with Abenex REIM's strategic objectives, allowing them to realize value from assets developed over five years. The transaction effectively doubles the asset size of the PPG RETAIL fund, demonstrating the fund's commitment to expanding its footprint in the French retail market. Acquiring a recognized brand like Grand Frais not only enhances the fund's portfolio but also positions it to benefit from the ongoing trends in consumer preferences for specialty food markets.

This deal further reflects the growing investor confidence in the retail sector, as well as the continued interest in properties leased to established brands. The transaction signifies a calculated move towards enhancing asset management and growth potential within the fund.

Information about the Investor

Pierre Premier Gestion is a notable player in the investment sector, particularly focusing on retail real estate through its OPPCI PPG RETAIL fund, which was launched in June 2018. The firm is dedicated to increasing its asset base and seeks to capitalize on growth opportunities within the retail market, underscored by strategic investments in well-established brands such as Grand Frais.

The company’s approach underscores a robust understanding of market dynamics and consumer trends, allowing it to identify promising investment opportunities. With the completion of this transaction, Pierre Premier Gestion is well-poised to leverage the strengths of its expanded portfolio to achieve sustainable returns.

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This transaction presents a strong investment opportunity for the PPG RETAIL fund. Acquiring a portfolio of properties leased to a popular and rapidly growing brand like Grand Frais not only enhances the fund's asset base but also aligns with prevailing consumer trends favoring specialty food offerings. The deal positions the fund to take advantage of the evolving retail landscape in France, where unique shopping experiences are in demand.

The expansion of PPG RETAIL's portfolio could lead to significant long-term benefits, given the brand's established market presence and the ongoing consumer shift toward quality over quantity. This strategic acquisition illustrates a thoughtful investment philosophy that capitalizes on growing trends in the retail sector.

Moreover, the partnership with Abenex REIM reflects a collaborative effort to manage and optimize retail assets effectively. With expert advisory support from various firms during the transaction, this investment showcases a sound approach to enhancing the value proposition of the portfolio over time.

In conclusion, this deal not only represents a positive move for Pierre Premier Gestion but also reflects the anticipated growth trajectory of the retail sector in France, making it a potentially beneficial investment both in the short and long term.

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