Northcliffe Asset Management, a global sale-leaseback investment manager, has announced that its affiliated investment vehicle ThreadGreen Industrial Limited has completed a sale-leaseback on the primary production and office properties of Coperion GmbH.
The assets, totaling over 50,000 m², are located in Stuttgart and Baienfurt, Germany.
Coperion has committed to a 20-year lease on the properties. Northcliffe and Coperion will jointly fund and manage the re-development and refurbishment of the Stuttgart location. The total transaction size was approximately 27 million.
Alistair Calvert, Managing Partner of Northcliffe in Europe, said: "Coperion approached us with the desire for both sale-leaseback financing and a real estate partner to support the funding of the redevelopment of the Stuttgart facility. We worked closely together to create a single solution package. Coperion is the global leader in its field and is enjoying remarkable growth. We are therefore very pleased to have become one of the company's long-term financing partners."
Günter Bachmann, CEO of Coperion, said: "Northcliffe structured a transaction that provided capital to fund the expansion of our business as well as contribute towards developing a state of the art manufacturing facility in Stuttgart. The sale-leaseback will be highly accretive to our business, both from an operating and finance perspective. We look forward to a long-term relationship with Northcliffe."
In sale-leaseback deals a company sells its real estate to an investment manager who simultaneously enters into a lease for the assets. The company is provided with 100% of the market value of the assets in cash. The capital released through this arrangement may be used by the corporate to repay debt, pay a dividend to shareholders, fund growth, acquire additional facilities, or finance add-ons/acquisitions.
Alistair Calvert said that the opportunities in sale-leaseback transactions have never been greater with the spread between the rental yield on these investments and financing costs at close to historic highs. Constrained capital markets and the over-leveraged corporate sector have resulted in a huge supply of transactions. The undeveloped nature of the European market which at US $4 trillion has twice the level of owner occupied commercial property of the US suggests that this deal supply will continue.
Source: Bellier Financial