Closed-end real-estate investment company Warehouses De Pauw (Euronext: WDP) has signed on April 24, 2012, the final purchase agreement (after completion of the due diligence) for the acquisition of the property portfolio of a Dutch construction company known as the 'Lake Side Portfolio'.
With this acquisition, WDP acquires eight brand new, superior quality sites with a gross lettable area of 150,000 m², of which have long-term lease contracts with an average duration of 12.5 years. The investment budget amounts to 105 million, which delivers an initial rental yield of 7.8%. The acquisition is part of WDP's growth strategy and represents a substantial expansion of the Dutch portfolio of which the investment value climbs to more than 300 million.
With the closing of this transaction, WDP increases its expectation of the net current profit for 2012 to at least 50 million. Furthermore, WDP strengthens its cooperation with ABN AMRO in the Netherlands through an expansion of the financing package with 20 million.
'Lake Side Portfolio' transaction considerably strengthens the portfolio
The new build portfolio consists of eight sites with approximately 150,000 m² of leased surface. The modern, high-quality logistics and semi-industrial properties are situated at strategic locations across the Netherlands. The portfolio is 100% leased (of which two pre-leased projects) at market appropriate conditions to established national and international companies for an average fixed term of 12.5 years. The initial annual rental income from this portfolio is 8.2 million and will be indexed annually. Approximately one quarter of the rental income involves triple net lease contracts. The initial yield of this acquisition is 7.8%.
All buildings are recently delivered or soon to be delivered properties, with a high-quality finishing and with a construction that meets international standards. Furthermore, two properties, which together represent nearly 40% of the leasable surface, are BREEAM certified.
The locations are easily accessible via major motorways and are supported by a healthy local letting market. The properties are spread across the Netherlands in Roosendaal, Oss (#2 sites), Veghel, Helmond, Nieuwegein, Zwolle and Beek (Maastricht-Airport). They nicely complement the current locations in the existing portfolio.
The current WDP portfolio with a fair value of 989.4 million increases to nearly 1.1 billion through the proposed acquisition. The fair value of WDP's Dutch portfolio increases from 210 million to more than 300 million, thereby creating an attractive and cost efficient platform by WDP in only a few years' time in the Netherlands.
Because of the long-term lease duration of the acquired properties the average remaining duration of the lease contracts increases (up to the first possible termination date) from 7.2 years to 7.7 years (including solar panels).
Phased transfer in the course of 2012
The transaction includes the purchase of eight logistics and semi-industrial buildings for a global investment budget of 105 million (including transaction costs). The six leased buildings which are already completed will be transferred on April 27, 2012 for an amount of approximately 83 million.
The economic transfer of the three properties already generating rental income at the start of the current calendar year is foreseen from January 1, 2012 onwards. The two fully pre-leased projects currently under construction with investment budgets of approximately 10 million and approximately 12 million are expected to be completed and transferred respectively in early September 2012 and early December 2012. The seller is a reputable, privately-owned Dutch construction company mainly active in the construction of industrial sites.
Expansion of the financing package through ABN AMRO and new hedges
The start-up of the cooperation with ABN AMRO in 2011, as a support to the further growth of WDP in The Netherlands, was strengthened with an increase of the financing pac