Target Information

The SCPI Elevation Tertiom, managed by Elevation Capital Partners under the Groupe Inter Invest, has continued its investment strategy by acquiring 35 brand-new commercial spaces in La Possession, Réunion. This acquisition follows a previous purchase in Saint-François, Guadeloupe, and is valued at €19.9 million, projecting a gross yield of 8.5%. The commercial properties will be part of the mixed-use Cœur de Ville project, which combines housing, retail, and public amenities.

Industry Overview in Réunion

Réunion Island, a French department in the Indian Ocean, has been experiencing significant demographic growth, with an increase of 21.5% from 2007 to 2017 and projected additional growth of 13.5% by 2030/2032, reaching an estimated population of 40,000 residents in La Possession. This demographic wave has prompted the need for enhanced commercial and residential offerings to meet the growing needs of the local population.

The Cœur de Ville initiative, spearheaded by Opale, is poised to be a pioneering eco-district in the region, emphasizing sustainability and innovative urban planning. The project aims to rejuvenate the city center by increasing the commercial footprint and providing essential services that cater to the community's expectations.

The Cœur de Ville project, which includes the Kanopée program, has garnered national and international accolades for its environmental performance. It is a BREEAM-certified project, recognized for its bioclimatic design and commitment to sustainability. Some awards include the Trophée des Outre-Mer Durables and the second place at the Prix Ville Durable during COP 24, highlighting its impact on sustainable urban development.

Rationale Behind the Deal

The purchase of the 35 commercial spaces aligns seamlessly with SCPI Elevation Tertiom’s investment strategy, focusing exclusively on yielding real estate opportunities in French overseas territories. The Cœur de Ville project anticipates accommodation for an additional 5,000 residents, which, along with the surrounding population of over 100,000 within a 20-minute radius, presents a strategic opportunity for enhanced retail and service offerings.

Investor Information

Elevation Capital Partners is a key real estate investment management firm known for its focus on sustainable investments in overseas regions. Within its portfolio, SCPI Elevation Tertiom stands out as the only yield-focused SCPI dedicated to tertiary real estate in overseas territories, reflecting a strategic approach tailored for unique market dynamics.

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This acquisition represents a strategic investment in a growing market supported by substantial demographic growth. The development of Cœur de Ville not only addresses immediate commercial needs but also positions itself within the framework of sustainable urban development—a crucial aspect for future investments. Additionally, the expected population influx will likely enhance demand for retail spaces, increasing the viability of the investment.

Furthermore, the recognition received by the eco-district and its associated projects underscores the potential for long-term value creation. The accolades serve as a testament to the quality and sustainability of the investment, making it a compelling proposition for investors seeking opportunities in emerging markets.

However, it is essential to note the inherent risks related to real estate investments, including potential capital losses and liquidity concerns. Investors should weigh these risks alongside the promising prospects of La Possession’s demographic growth and the forward-thinking nature of the Cœur de Ville project when considering their investment strategies.

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