Overview
Redefine International has announced that it has bought 56 German retail properties in a 50/50 joint venture with Redefine Properties Limited (Redefine International’s largest shareholder). The whole portfolio is valued at €157m which equates to an initial yield of 7.5%. The portfolio comes with €100m of bank debt, they expect to refinance this shortly (approximately 50% loan to value, with an all in cost of debt of 1.80%) and end up with a yield on their equity investment of 11%. As part of the deal, Redefine International will manage the portfolio in return for a management fee of 0.375% of Redefine Properties’ share of the portfolio’s gross asset value.
The 56 properties total over 128,000 sqm of lettable area and comprise a mix of stand-alone supermarkets, foodstore anchored retail parks and cash and carry stores. They say the properties are well located within their respective markets, with 85% of the total annual rental income located in western Germany and Berlin and the remainder in eastern Germany. Key portfolio attributes include: Gross rental income of EUR12.6m with a WAULT of 10.3 years; portfolio occupancy of 99.2% by area; 100% of gross rental income is subject to indexation of between 65% – 75% of German CPI; and strong tenant covenants with the likes of Edeka, Netto, Rossmann and Real (who account for over 90% of gross rental income).
RDI : Redefine International acquires German portfolio