What happened? Gecina have signed an agreement to acquire a 32,200 sqm office complex in Paris CBD for EUR435m. The complex comprises two adjoining assets; a 25,000 sqm vacant office (Rocher) with asset management potential and a 7,200 sqm fully let office (Hotel Particulier). Development capex for Rocher is estimated to be EUR30-40m, generating a potential yield on cost of 6.2-6.4%, with completion expected in 12-15 months. BNPP Exane View: We view the transaction positively, which appears to strike a balance between attractive development returns for Rocher and short-term income support from Hotel Particulier that will prevent immediate earnings dilution. The acquisition will also complement the company''s existing asset on the same block - 7 Madrid - allowing it to create a mini cluster that totals c.45,000 sqm. Assuming average rents of EUR800/sqm and capital values of EUR13,300/sqm (as disclosed), this implies income of EUR5.8m/yr from Hotel Particulier and a c.5.5% NIY. We have spoken to the company and understand that a yield on cost for Rocher of 6.2-6.4% is achievable assuming rents of EUR925/sqm and capex of EUR30-40m. Taken together and assuming Hotel Particular rents can grow to EUR925/sqm (vs current levels of c.EUR800/sqm), a yield of 4.5% for the complex would imply a valuation of c.EUR662m and profit on cost of c.40%, equivalent to 1.7% NTA accretion. We expect the acquisition to be funded by proceeds from the student portfolio disposal (EUR539m) that is due to close at the end of H1, with no earnings dilution this year and low single digit accretion post completion of the Rocher refurbishment, where the complex has potential to generate c.EUR30m of annual rental income (assuming rents of EUR925/sqm). The risk we highlight, is that the deal increases leasing risk for 2027 which is when Engie are due to vacate its tower in La Defense and three flagship developments are also due to complete. Transaction overview . Preliminary agreement signed to acquire a...