CLS to convert Paris office into serviced apartments
CLS Holdings
89.80p
11:39 26/06/24
CLS Holdings announced plans on Monday to convert its Debussy office property on Boulevard de la République in La Garenne-Colombes, Paris, into serviced apartments.
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The London-listed firm said it has signed agreements with Edgar Suites and Nexity to facilitate the transformation.
It said it would invest €12m over the next two years to repurpose the existing five-story, 45,187 square foot building into 57 serviced apartments.
Edgar Suites, a successful aparthotels operator, would manage the property on a 12-year lease, including both a base rent and a turnover component.
Nexity, a leading French developer, had been contracted for the construction work under a fixed price agreement.
The redevelopment was scheduled to start early next year, with completion expected by the end of 2026.
CLS said the project was contingent on obtaining the necessary statutory permissions, adding that discussions with city authorities were well advanced.
The Debussy building, constructed in 1993 with a glass and stone façade, featured underground parking and green spaces at the rear.
Identified as requiring significant investment to meet modern office standards, the conversion aligned with CLS's long-term sustainability strategy.
The company said the project aimed to address the increased demand for housing in major cities, recycle the existing structure, and reduce the impact of embodied carbon, while delivering substantial benefits to the local community.
“We always look to optimise the use and value of our properties and the conversion to serviced apartments offers an opportunity to generate attractive returns by converting an older office building in a growing and dynamic part of Paris,” said chief executive officer Fredrik Widlund.
“We are delighted to have signed these agreements that will both diversify our French portfolio and give us exposure to a growing and exciting sector of the market.
“We believe there will be further opportunities such as this where we can create value through innovative development and reuse, maximising the efficiency of our portfolio for the years ahead.”
At 0820 BST, shares in CLS Holdings were down 0.7% at 85.6p.
Reporting by Josh White for Sharecast.com.