PARIS-French REIT/SIIC Altarea Cogedim has launched themarketing of a major Paris residential and office development,Paris 7 Rive Gauche, on the site of the former Laennec hospital,which dates back to 1632. The project involves the renovation ofthe 4-hectare site, which originally cost Altarea $1 billion. Thebuilding has been unoccupied since 2000 when the hospital movedout.

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The listed historical buildings, owned by German insurerAllianz, will be converted into 185,000 square feet of offices,while more recent buildings will be demolished to make way for newresidential units. Twelve new residential buildings will beconstructed, offering 191 units over 175,000 square feet. There arealso plans for 80 social housing units, a student residence, a homefor the elderly and 48,000 square feet of shops.

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Altarea Cogedim, primarily an owner of shopping centres, hastaken 10 years to achieve permission to develop the site, followinga series of setbacks. Demolition will start in July, withconstruction beginning in first quarter 2011, and completionscheduled for 2013. The group said the project will be one of themost important real estate operations for 50 years in the Frenchcapital's prestigious 7th arrondissement, and confirms its capacityfor projects in all its asset classes - residential, office andretail. Founded in 1994 by Alain Taravella, the group had aportfolio of $2.9 billion at end-2009. It acquired residentialproperty developer Cogedim in 2007, and Cogedim's market share hasincreased 65% since then.

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"We are very pleased that we bought Cogedim three years ago. Ourpresence in the residential property market contributessignificantly to the group's cashflow," said Taravella recently."If current market conditions are maintained, the residentialdevelopment activity of the group will exceed $1.2 billion (in2010) and I am hoping that reservations will be up 80% from 2007.”Cogedim residential development revenues declined 7.7% to $685million last year but Taravella expects a strong increase inrevenues and profit in 2010 and 2011. The group will market 84 newhousing programs in 2010 and expects to start work on 4,400 newhousing units, an increase of 50% from last year. Its order backlogis now equivalent to 21 months of revenues, compared with 19 monthsat end-December.

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Allan Saunderson isa managing editor of PropertyInvestor Europe anda contributor to GlobeSt.com.

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