Paul Raingold, founder, and daughter Sharon Raingold, GCI managing director, have the 64,000 square meter Tour Ava ready to start in Paris-La Défense.
Like other property groups, CGI is prevented from moving forward for now by the unwillingness of banks to finance large developments without at least 50% of the space pre-let. The two told PIE in an interview that because of the global crisis, tenants have been unwilling to commit. Despite the crisis, there is not a lot of distressed property available.
"The thing is everyone had been expecting distress but there has not been a lot of it really," Sharon says. "The banks today are not foreclosing; they are generally extending loans on good quality assets so we are seeing very few assets today that are of good quality."
Paul, who founded GCI in 1975 and experienced real estate crises in the 1970s and early 1990s, says difficult economic times means companies and tenants are looking for savings.
"They may want to regroup or want low rents – outside Paris around €300 or €320 per square meters per annum - though of course in La Défense much higher - good value rents, good floor plates, new buildings where they have economic person-space ratios, and good transport," he said. "There's only a limited number of buildings that can respond to that today and there will be even less in a year's time. That either means projects on drawing boards will get pre-let or tenants will have to make quicker decisions."
GCI focuses on investment, asset management and development. It presently has around €550 million under management, and over the years has been involved, with partners, in more than one million square meters of prime office space in the main business districts of Paris and the greater Paris region. With partners, it has invested over the years in more than €2 billion of offices and other commercial properties. Paul was selected in the 1980s to develop the 'Collines' (Collines de l'Arche project) on the side of the Arche de la Défense - together with Gerald Ronson's Heron International, one of Britain's more colourful and well-known developers of the era.
In the next decade, GCI was one of the original developers in the huge Coeur Défense, now infamous for causing a mountain of legal claims after it was bought in 2007 by Lehman Brothers and financed partially via a massive CMBS – prior to the bank collapsing a year later.
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