London & Capital continues to blaze a trail in Germany as it announced a landmark deal with a UK investor, securing a portfolio of thirty-eight properties worth more than €225 million for the London & Capital German Real Estate Fund. This is the largest purchase in the Company's history and will see assets in the Fund soar through €650 million.
The portfolio contains thirty-eight freehold assets exclusively located throughout the former West Germany. The geographical spread complements the current Fund as there is a low correlation to the existing total weighting. The newly-built, high quality retail assets are a well-balanced combination of supermarkets, shopping centres, out-of-town retail parks and local convenience schemes that will contribute to the ongoing sector diversification of the Fund, which in turn will enhance risk spread. Securing a portfolio where the average lot size is €5.9 million has enabled London & Capital to maximise the liquidity for the Fund with regard to scheduled exit scenarios. This acquisition plays to the key strengths of the Fund, with the majority of the income driven by retail units let to national or international core covenants. There is significant room for income and capital growth as the average weighted unexpired lease term of the properties is over 10 years.
Ralph Weichelt, Country Fund Manager at London & Capital said: "This is a momentous win for London & Capital that drives assets in the Fund up by 50%. The acquisition of thirty-eight assets within this one portfolio will further strengthen the Fund both in terms of risk and asset class exposure. We are looking at a projected gross contractual rental income of €14.6 million per annum with plenty of capital growth opportunities."
Iain Keys, Director of Real Estate at London & Capital, added: "We are seriously committed to the opportunities in German commercial real estate and will continue to source first-class covenants with high-quality tenants. This acquisition will contribute to the strong performance of the German Real Estate Fund to date, generating strong returns from mid and long term rental growth prospects."
Source: London & Capital