Patrizia Immobilien has acquired a German retail portfolio for €205 million ($238 million) from Redefine International.
The Leopard portfolio comprises 66 German retail properties, including a mixture of stand-alone supermarkets, food-store anchored retail parks, and cash & carry stores totaling more than 1.5 million square feet of lettable area.
The off-market acquisition was made on behalf of an individual mandate of a foreign institutional investor.
Due to the granularity of the portfolio, its disposal will see the Patrizia Immobilien’s average lot sizes increase significantly, while the portfolio will show an increased weighting to locations and sectors where the company expects to benefit from higher rates of growth to support its medium-term target of between 2 percent and 5 percent rental income growth.
“In line with our strategy, we are consistently looking to realize value by recycling capital at attractive prices,” said Mike Watters, CEO of Redefine International. “We are very pleased to announce this opportunistic disposal which capitalizes on an exceptionally strong German investment market, resulting in a 10.8 percent premium achieved on book value and a 12 percent premium to the price paid for the acquisition of a controlling interest in April 2017. Following the deal, our overall exposure to Germany will decline from 27 percent to 18 percent, and we anticipate reinvesting the proceeds into the United Kingdom, where we are witnessing some particularly attractive investment opportunities. However, we remain committed owners of and investors in properties that demonstrate strong fundamentals, which coupled with an experienced team of local asset managers, ensures Germany remains a strategic market for us.”
This is the second such off-market retail acquisition recently announced by Patrizia. At the end of September, the company announced the €400 million ($463 million) purchase of an 85-property portfolio in Germany. These acquisitions grow Patrizia’s retail assets under management to more than 600 properties with a value of more than €4 billion ($4.6 billion), more than half of which are food retail assets.
