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ANF acquired 159 hotels (with 11,455 rooms) belonging to the B&B hotel chain, which is number three in economy hotels in France. A firm 12-year lease was signed with B&B together with an agreement, under which ANF undertook to be a partner in the chain’s expansion.
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Capital increase & shareholders
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A €335 million capital increase in October 2007 helped finance part of the B&B acquisition, while diversifying ANF’s shareholder base.
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Eurazeo, ANF’s majority shareholder, did not subscribe to the October 2007 capital increase, reducing its shareholding to less than 63%.
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The value of the historical assets increased by 40% between 2006 and 2007 (like for like) to €922 million excluding transfer taxes at 31 December 2007. The hotels are valued at €460 million excluding transfer taxes.
The average value of existing properties was €2,760 per m2 excluding transfer taxes (not including B&B).
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Retail space in Marseilles
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The Rue de la République has been launched commercially. Major chains such as H&M and Sephora are now open. This is the realisation of an ambitious strategy launched two years ago to reintroduce retail space.
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Inauguration of Rue de la République in Marseilles
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Inauguration of the first tranche of Rue de la République on 8 December 2007, in the presence of the Mayor of Marseilles, showed the success of efforts made over the last two years to install big name chains and give a new face to this major artery in Marseilles.
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The first Starbucks outside the Paris area opened in Lyon, while a Monop’ will open in Rue de la République. In addition to their commercial qualities, these chains also bring new pedestrian footfall to a part of the road occupied by retailers.
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Delivery of first projects in Marseilles
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Of the 15 projects representing 135,000 m2 in net floor space, two have been delivered in Marseilles: the 446-space Mazenod car park was delivered in October and is fully let; and a fully-refurbished building with 2,638 m2 of offices and 530 m2 of retail space on Place de la Joliette is already occupied.
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A project to restructure a complex of more than 31,000 m2 in Lyon is under review.
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ANF has signed an undertaking to swap land with Fondation Ambroise Paré. The Paul Desbief and Ambroise Paré hospitals have decided to merge on ANF land in the Euroméditerranée site, while the current location of the Desbief hospital, near Place de la Joliette, will pass into ANF’s ownership.
ANF will then undertake a mixed programme on this site from 2012, while programmes will be carried out by 2012 on other land beside the new hospital. This will remain in ANF’s possession and be better for construction.
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In line with its commitments to the Marseilles local authorities, ANF has completed and rented 100 social housing units. 39 social housing units are under completion in Lyon.
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Message from the Chairman of the Supervisory Board : Alain Hagelauer
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2007 ushered in a significant new development phase for ANF. There was a major growth operation in the form of the acquisition of B&B hotels, which will help both to accelerate the pace of growth and ensure recurring revenue over the long term.
Renowned financial investors, recognised property sector operators, have become shareholders in ANF, and will now help to implement your company's strategy. Their presence as shareholders demonstrates their confidence in the company's future valuation.
With the inauguration of the Rue de la République urban renewal project, the year ended also brought real commercial upgrading of this whole area, an area which lies at the centre of the city’s economic activity. Overall improvement of the district has been subordinated for many years to realisation of this ambitious urban renewal project with a group of public and private investors. Given the size of its residential, commercial and office property estate in the sector, where a substantial proportion of quality renovation has now been completed, ANF is already benefiting from the upgrading of this part of the city through increased and increasingly competitive demand.
Similarly in Lyon, the city has been engaged in an ambitious urban renewal project for a number of years, involving the creation of commercially attractive pedestrian zones in the city centre. ANF is deriving full benefit from the resulting strong demand, given the location of its properties in the area.
Given these positive trends, the latest valuation of ANF’s properties at the end of 2007 has led to a more than 40% revaluation. This provides recognition of the power of the strategy implemented by the board and ANF’s team.
This successful strategy will be pursued at an even faster pace over the next few years as major organic growth projects combine with exploitation of substantial property reserves which will provide additional growth plus significant and secure value creation.
The Supervisory Board will give its full support to the Board of Directors and ANF’s team so that the company may continue with this growth strategy on the best terms, even though the economic environment may be less rosy than in recent years.
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