Asset manager London & Capital has announced that it has increased exposure to the retail market in its German Real Estate Fund via the acquisition of two hypermarkets in Germany. The transaction volume totalled €40.6 million.
The latest acquisitions are located in Falkensee and Weimar, both being purchased from German state insurer Provinzial. They are leased on long leases, which offer the prospect of secure income streams over an extended period to real, a 100%-owned subsidiary of retail giant Metro Group.
The Falkensee acquisition is 25 km north-west of Berlin and involves the freehold for 9,000 m² of supermarket accommodation. It is in a prominent in-town retail location. The second acquisition for the Fund is a 9,110-m² hypermarket located out of town in the newly developed Eastern suburb of Weimar-Süßenborn. The property benefits from a substantial regional catchment area, and enjoys excellent transport links with abundant parking facilities.
London & Capital only targets properties with high calibre tenants and was attracted to these most recent purchases because of the enviable reputation Metro Group enjoys as one of the strongest retail giants in Europe. The two purchases take the total Fund size above €375 million.
Ralph Weichelt, German Country Fund Manager at London & Capital, said, "These latest acquisitions, which come just weeks after we acquired hypermarkets in Tubingen and Eisleben, have significantly boosted our exposure to the retail market a market which is becoming increasingly active as the German consumer regains his appetite, after a long period of being on a near-starvation diet. These sites are in prime locations and are both on long lease agreements to a prominent player in the European retail scene. London & Capital will continue to target the highest quality tenants and buildings in Germany for the German Real Estate Fund."
Iain Keys, Director of Property at London & Capital, added, "The growth we are experiencing in the German commercial property market at the moment amounts to a once in a lifetime opportunity. We are seeing a country that has all the regulatory advantages of a developed market produce returns akin to an emerging market."
Source: Phoenix Financial