Allan Saunderson is managing editor of Property Finance Europe and a contributor to

PARIS-Société Foncière Lyonnaise, one of France’s largest REIT/SIICs, has in recent weeks completed disposals totaling €117 million, the first since its former major shareholder, the struggling Spanish property group Colonial, which requested transaction suspensions in 2007/8, sold its SFL stake to private equity group Orion Capital Managers.

SFL Managing Director Nicolas Reynaud told PIE: “We initiated these deals at the beginning of 2009, and the disposals are in line with our 2009 disposal program. They remain modest as they only represent 3% of our portfolio.”

Proceeds may contribute to paying back two loans falling due. SFL announced that even with sufficient credit lines, it had entered negotiations in order to extend facilities. “Following changes in the composition of Colonial’s management and Board in summer 2008, we are once again free to carry out such transactions, but we remain both selective and assertive,” the group said in a release – though it gave no indication if the sales proceeds matched or exceeded the asset prices on book for the five properties.

The company at the end of 2008, owned a portfolio worth €3.67 billion of office and retail properties located in the key areas of Paris CBD and La Défense.SFL registered a loss of €393 million for 2008 against a €416 million profit in 2007, and said 2009 first quarter results revealed a 14.5% increase in rental income reaching €51 million compared to Q108. The occupancy rate across the portfolio fell to average 93.5% from 98.3%, while debt remains around the same as at the end of 2008 at €1.14 billion – giving SFL a loan to value now at 31.5%.