Rankvale European Property Partners (REPP) has acquired the Seidnitz Centre in Dresden via the acquisition of shares in a Limited partnership for €95 million representing an initial yield of 6.8% p.a. The acquisition represents the third, and largest, REPP investment to complete in the last month, following the acquisition of two new build shopping centers in Bamburg and Berlin for €47.5 million.
The Seidnitz Centre comprises 26,756 m² of retail and leisure space at lower ground and ground floor level, 7,360 m² of office accommodation in four separate units above the Centre, and an adjoining four-story, 750-space car park with direct walkway access into the prime ground floor retail areas.
All of the retail space and office accommodation is leased to Centre Entwicklungs- und Verwaltungs GmbH ("CEV"), a wholly owned subsidiary of the Ava/Edeka Group which controls 183 Marktkauf self-service department stores, 148 DIY stores and 90 Krane optical stores across Germany. CEV's lease is for a term of 20 years expiring on 30 June 2014, with two extension terms of five additional years. The rent is subject to indexation. The Centre is anchored by CEV brands MarktKauf Self Service Department Store and MarktKauf Beverage market, alongside 39 other retail sub-tenants which include national brands such as MediMax, AWG Fashion GmbH, Deichmann Shoes, Vogele, Zooladen, Mister & Lady and DM Drugstore.
The office accommodation is fully let with over 30% of the space rented as a specialist medical center for the local Seidnitz residents. The remaining office space is leased to local professional firms (Lawyers/Accountants) and a Call Centre.
The recent acquisitions build on REPP's strong track record of structuring and financing good quality, attractive yielding assets in Continental Europe. In the past three years it has completed transactions in France, Germany, Switzerland and Austria totaling in excess of €800 million.
Brian Cooper, chief executive of REPP, said, "We are very pleased to have secured another high quality German retail asset let to a strong covenant. This, our third acquisition in the past month, and second with CEV as the head lessee following Flora Park, Magdeburg, has been achieved through leveraging Rankvale's strong relationships with local investors and building on our acquisition record of having completed over €350 million of retail deals in the German market in the last 12 months."
Graham Emmett, partner of REPP, added, "We like the economic fundamentals in the German retail market. Our experience has shown that retailer demand for quality space in good locations remains high and with expected retail sales growth in the next few years, allied with the limited supply of new shopping centers and the ownership of many existing centers remaining in long term funds, underpin our confidence in Seidnitz being a good performing investment."