Kering takes two major Paris properties off market

Five months after attempting to sell large stakes in two major Paris properties in prime central real estate, luxury giant Kering has quietly taken them off the market.
 

235 Rue Saint Honoré – DR

In an unexpected move, Kering put the two large properties – both boasting top-level retail locations – up for sale in June, barely six months after acquiring them. This spring, Kering acquired these properties on Paris’ two most vital high-end shopping streets, at 35 avenue Montaigne and 235 rue St Honoré respectively.
 
Both are currently undergoing radical reconstruction, to become major new flagships for two mega Kering’s brands – Saint Laurent and Gucci.

But, in a surprise move, the Paris-based luxury conglomerate put both properties up for sale in June. The group apparently hired Cushman & Wakefield to handle the transactions and was understood to be hoping to sell 80% of each of these prestige buildings.
 
Now, however the two trophy assets – 35 avenue Montaigne with 8,300 square-meters and 235 St Honoré, which stretches around the corner to include 12-14 rue Castiglione, with a total 8,000 square-meters – were both apparently unable to find purchasers. In effect, given weak market conditions, caused by high interest rates and overall global concerns, Kering was unable to find the price it sought for either of these two real estate assets.
 
According to CFNEW Immo, the well-informed French real-estate website, Cushman & Wakefield sent teasers to some 60 potential bidders. Reportedly, over a dozen possible buyers visited the sites, which are blends of retail and offices.  
 
A spokesperson for Kering declined to make any comment on these property movements.
 

35 Avenue Montaigne, currently home to Valentino – DR

Formerly the Canadian Embassy in Paris, 35 avenue Montaigne currently boasts a three-story flagship of Valentino on its south side. In July, Kering signed an agreement to acquire 30% of Valentino for €1.7 billion from Mayhoola, an investment fund controlled by the Qatari royal family.

As noted, Kering paid €860 million for 35 avenue Montaigne, paying €250,000 per square-meter of retail space, and 40,000 per square-meter of office space. It has kept the largest retail space to build the world’s largest flagship for Saint Laurent.
 
As also noted, Kering paid €640 million to buy 235 rue St Honoré. Where Kering plans to open a giant Gucci store in 2025, designed by architect Franklin Azzi and modelled on its flagship and concept gallery in Piazza della Signoria in central Florence.
 
The plan to sell parts of the real estate did raise eyebrows and cause head shaking among real estate brokers and property investors in Paris.
 
“The whole plan seemed very strange. I suppose Kering thought that if they kept 20%, they would still control the retail space. But, if the purchaser wanted to resell the building, Kering has a right to legal first option in France, so cannot be evicted. But put it another way, why would anyone buy a building knowing that you can practically never evict your largest tenant?” sniffed one owner of multiple central Paris retail and offices spaces.
 
He speculated that the ultimate aim of François-Henri Pinault, CEO of Kering and scion of the controlling family, was gaining control of a few key retail jewels. And keeping them off limits from Bernard Arnault, CEO and controlling shareholder of the far larger LVMH, which has also been on a real estate buying spree. Case in point, the new Gucci super store will be located right across rue St Honoré from the chicest boutique of Louis Vuitton, LVMH’s crown jewel.
 
As reported by FashionNetwork.com, both Kering and its larger rival LVMH went on a real estate shopping in the past year, acquiring an estimated €2.4 billion worth of buildings in central Paris.
 
Already, real estate gossip is focused on Kering next move. Will Pinault bid for building which will house the future Saint Laurent store – 123 Champs Elysees? Tempting, seeing as the avenue attracts 100,000 visitors daily, 70% foreigners.
 
The decision to take the two properties off the market, also comes as Kering successfully issued a £800 million bond, increasing its financial flexibility and diversifying its funding sources by accessing the sterling bond market for the first time ever in its existence.
 
In 2022, Kering had over 47,000 employees and revenue of €20.4 billion. Its remarkable stable of luxury brands includes Gucci, Saint Laurent, Bottega Veneta, Balenciaga, Alexander McQueen, Brioni, Creed, Boucheron, Pomellato, DoDo, Qeelin, Ginori 1735 as well as Kering Eyewear and Kering Beauté.
 
 

 

Copyright © 2023 FashionNetwork.com All rights reserved.

FOLLOW US ON GOOGLE NEWS

Read original article here

Denial of responsibility! Todays Chronic is an automatic aggregator of the all world’s media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials, please contact us by email – todayschronic.com. The content will be deleted within 24 hours.

Leave a Comment