Trying to get down to the heart of the matter in La Defense

Despite all the official optimism in Paris over prospects for the French property market, worries run very deep, particularly in La Defense, due to ebbing demand for office space in the crisis, and especially over the largest single office asset in Europe, Coeur Defense. This is the asset that changed hands at the top of the market for e2.1bn and a 4.8% gross yield in the first half of 2007, neatly sold by Unibail-Rodamco to Lehman Brothers just before the crisis hit. Although it seemed - indeed it was - a coup for UB's highly capable CEO Guillaume Poitrinal, the project was steered by his predecessor Léon Bressler, and the seeds for the deal laid much earlier... Here is a little history for those who came into the theatre after the 1990s - the European real estate theatre, that is. In 1999, still several years away from 2007's merger with the Dutch group Rodamco, Unibail acquired SAS Doria, a company that owned e710m in property assets held in a holding Crossroads Property Investors. CPI owned 13 prime properties, mainly offices in the Paris CBD and La Défense. The portfolio also included the 40% stake in Coeur Défense that Unibail did not retain as developer - as well as the Cité du Retiro renovation project in the heart of the Paris CBD. Unibail paid in 2.4m of ordinary stock, at the time 13.4% of capital. Then in 2003 it refinanced the entire, massive office complex of 182,000 sq.m. through an e820m non-recourse Commercial Mortgage Backed Securities financing - remember those? ...