W. P. Carey Inc., a global net lease REIT, announces that CPA®:17–Global, one of its managed non-traded REITs, has acquired a hypermarket in Gelsenkirchen, Germany. The facility is let to Real, Germany’s largest hypermarket operator and a subsidiary of Metro AG, the German retail conglomerate.
Real is one of the four key business units of Metro AG (Metro). Metro, one of the world’s largest retailers, is rated BBB-/Stable by S&P and is listed on the Frankfurt Stock Exchange with a market capitalization of approximately €7.9 bln.
The 11,915 m² facility located on a 30,351 m² parcel includes 440 parking spaces and is well-positioned along a main connection route between Gelsenkirchen’s city centre and residential areas.
The hypermarket has been operating at this proven retail location for approximately four decades. The facility is a strong-performing asset in Real’s home German market, where planning restrictions limit future development and competition.
Germany is the largest national economy in Europe and is rated AAA/Stable by all major rating agencies. The German food retail industry is dominated by five players, of which Metro is the largest, and is considered as stable and mature.
Arvi Luoma, Director of W. P. Carey, commented: “This transaction offered the opportunity for CPA®:17 – Global to acquire a stable retail asset with an attractive risk-adjusted yield and subject to a long-term triple net-lease. While we believe retail in the United States is in many instances overbuilt, big box retail in Europe—in this case, Germany—with strong credits is a far more attractive opportunity. Having completed a transaction with Metro in Italy in 2011, we are pleased to expand upon this relationship and release capital from this asset that can now be deployed into Metro’s operating business.”