German closed-end fund manager KGAL said it has started marketing PropertyClass Frankreich 1, its first French real estate investment vehicle. The fund made its first acquisition in October 2010 with the purchase of an office building in Fontenay-sous-Bois, Īle-de-France, about 5 km east of Paris. The High Quality Environmental (HQE) property offers 20,000-m2 of office space and is entirely leased with a nine-year rental contract and no break option to France's largest bank, BNP Paribas.
'We are pleased that we have found a high-quality property at the right time for our entry into the French market. The office property market in Paris and in the Īle-de-France region offers ideal conditions for promising investment opportunities. Our experts are therefore continuously looking for new assets,' said Stefan Ziegler of KGAL.
The fund, with a volume of nearly EUR 100 mln, has a life of nearly 15 years and aims to generate returns of 5.75-6.85%.
The operation is in line with KGAL's strategy to widen its focus to France and the UK after having concentrated on Germany and Austria in the past years.
Earlier in 2011, KGAL bought 60 Gracechurch Street in London from Evans Randall for around £116 mln (EUR 137 mln), reflecting a yield of 5.45%. | 
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