The attraction of the Foncière Paris Nord real estate assets is intimately linked to the realisation of the “Grand Paris Express” transport project and its timing. The under-funding of this very ambitious project to the tune of some €35bn has raised some questions regarding its deployment rate.
The retaking of control over the project by the government has resulted in a first communication which seems to confirm the effective realisation of the project at least as far as Blanc-Mesnil, whose new station is vital to the revaluation of the FPN assets.
The press release (13-02) issued by the Société du Grand Paris Supervisory Board confirmed through an amended budget for 2018 “the notification of the calls to tender including the realisation of the section common to lines 16 and 17. This section includes the part of the line running from the station of Saint-Denis-Pleyel to the Le Bourget-RER, the connection to the Aulnay maintenance centre, the construction of the Le Blanc-Mesnil station and the connection to the Line 14 North (Mairie de Saint-Ouen/Saint-Denis Pleyel link)”.
The budget commitments do not constitute a schedule (not specified to date) and much less the project’s realisation. However, the confirmation of this priority given to the North Eastern line is good news. Note that the Aulnay maintenance centre mentioned is located after the station of Blanc-Mesnil when traveling from Paris which would appear to secure the project (see map below)
It is also stipulated that “by adopting this first amended budget for 2018, the government and the Ile de France local authorities enable the Société du Grand Paris to embark on the realisation of the Grand Paris Express lines whose entry into service is planned prior to the 2024 Olympic Games.”
The timing risks thus seem to be contained at this stage even if the value of the FPN project largely depends on the development works being launched early enough to deliver, for example, the housing before these same Olympic Games.
Line 16-17
No change to our valuation on this confirmation. It is nonetheless an opportunity to reiterate to what point the value of this project is speculative.
