International property investor VastNed Offices/Industrial (VNOI) has signed the agreement to sell its German office portfolio to alstria office REIT-AG in Hamburg (Germany). This disposal fits well in VNOI's reviewed strategy, as announced in the Shareholder Circular earlier this year. The total base consideration for the sale amounts to approximately 85.6 million.
The German office portfolio comprises five office properties located in Dusseldorf (three) and in Frankfurt (two). The total lettable floorspace amounts to 42,700 m².
Dependent on coming leasing activity an adjustment on top of the base consideration can be made with a maximum of 0.6 million. Taking into account the possible expiration of a number of lease agreements in the next half year the vacancy can increase to 41% as per January 1, 2012, resulting in a drop of the annual rental income close to 4.5 million. The book value as per end of March 2011 amounts to 102.9 million. The closing of the transactions is expected to take place within the third quarter of 2011.
The disposal of the German portfolio fits with the earlier announced renewed strategy, as stated in the Shareholder Circular, published March 22, 2011. VNOI at that time announced to review its German position and stated "it believed its German assets may find a better place in a different portfolio." This sale furthermore supports the balance sheet's loan-to-value. Next to this, the contemplated merger partner Nieuwe Steen Investments (NSI), also considers the German portfolio as non-core within their strategy.
Reinier van Gerrevink, Chief Executive Officer: "This sale is an important milestone for our company to get more focus on the core countries. We realize that the sale takes place at a price below book value, but results in a more sound balance sheet. In addition, selling the complete portfolio at once to one party provided us clear advantages too. Given our strategic choices we have to carefully consider market opportunities and now was the moment we would be able to enter into this transaction."
Source: VastNed Offices/Industrial