Hansteen Holdings (LSE: HSTN), the investor in UK and continental European real estate, has carried out a series of significant investment and leasing transactions in Germany, proving its expertise at asset recycling and asset management.
In the biggest transaction, just completed, Hansteen has acquired the German assets of the EIP Fund for 24.5 million, satisfied from existing cash resources. The price reflects an initial yield of 10.6% and the reversionary yield is more than 14%.
The portfolio comprises seven multi-let industrial estates, totalling 84,224 m² (906,600 ft²), located in Hannover, Dusseldorf, Hennef, Frankfurt, Rodgau, Stuttgart and Munich. The properties have a combined rent roll of 2.6 million a year from 32 tenants with 41% (34,917 m²/375,850 ft²) vacant. The estimated rental value (ERV) of the portfolio is 3.6 million a year.
This transaction follows the recent announcement (27 December 2012) of the acquisition of a £60 million (approx. €73 million) portfolio of multi-let UK industrial estates from The Industrial Trust. The portfolio comprises 32 estates, totalling 1.6 million ft², and has an annual rent roll of £6.1 million (approx. €7.4 million), representing a net initial yield of 10.1%, and vacancy rate of 16%.
Hansteen has also agreed five investment sales in Germany for a total of 15.9 million. The sales comprise properties in Neckarsulm for 2.75 million, in Freising for 2.45 million, in Aschaffenburg for 2.3 million, in Weiterstadt to the occupier for 8.05 million and three small residential blocks in Padderborn for 370,000.
On the leasing side, in a transaction which will give Hansteen a return of over 10%, it has pre-let a new building at Industriepark in Gottmadingen, southern Germany, to an existing tenant, Constellium Singen GmbH, an automotive structures business, for expansion space. The building will comprise 2,200 m² (23,680 ft²) of yard space and 1,500 m² (16,150 ft²) of unheated warehouse space with 192 car parking spaces. ConstelliumSingen has agreed a twelve year lease from practical completion, expected in late July, at an initial rent of 97,500 a year and has also agreed to extend its existing leases, which total around 1.5 million of rent a year, from five to twelve years.
Commenting on the EIP deal, Ian Watson, joint chief executive of Hansteen, said: "This portfolio provides excellent diversity of income and is compatible with Hansteen's intensive management approach. With its high vacancy rate it presents a number of opportunities to create significant added value through improving occupancy."
Paul Rodger, of Hansteen, commenting on the Constellium transaction, said: "This pre-let is further proof of our asset management expertise and strong relationships with tenants. Our regional asset management offices continue to enjoy considerable success in retaining existing occupiers as well attracting new ones."