Private equity real estate manager Garigal has purchased over €240 million of retail property in Germany.
Garigal's strategy is to grow the asset base of the portfolio to €1 billion in Germany over the next two years. This will be achieved by creating a €500 million portfolio of cash generating assets and augmenting this with new retail developments. Garigal will be seeking an alternate equity structure towards the end of 2007 to deliver its forecast asset growth.
The recently purchased properties were bought in a number of transactions and have mid to long term leases. The portfolio which has 2% vacancy comprises close to 265,000 m² of lettable area on over 525,000 m² of land. 70% of the properties are located within 2 hours drive of Frankfurt, 20% near Leipzig in the former east Germany and 10% around Bremen (an hour west of Hamburg). 90% of the Eastern exposure is to two properties each with leases of over 10 years to Kaufland (a major food retailer).
Commenting on the investments, Miles Stephenson, Managing Director Garigal, said: "We are carefully creating a portfolio where we can comfortably deliver stable investment returns over the long term. We continue to look for properties that have immediate cashflow as well as an asset management angle that can be delivered in three to five years."