Retail acquisitions in Austria
Mid-October 2017, Leasinvest Real Estate, through its Austrian subsidiaries, has acquired 100% of the shares of two Austrian companies, Kadmos Immobilien Leasing and Adrestos Beteiligungsverwaltungs. These companies hold respectively a DIY shop Hornbach Baumarkt of 13,300 m² and 10 shops with a global surface of 11,000 m² in a retail park ‘Gewerbepark Stadlau’ situated in district no 22 Stadlau of the City of Vienna, both very well located retail sites with an important footfall and holding leading positions in the City of Vienna.
The value of these two buildings amounts to €56.2m, which is lower than the fair value defined by our real estate expert. The average duration of the rental contracts is 9.3 years. The different indexed rental contracts are signed with renowned international and local retailers, among which the most important are Hornbach Baumarkt, Lidl, Intersport, DM (drugstore), CCC (shoes) and TK Maxx (clothing). The global occupancy rate stands at 100% and represents a total annual rent of €3.2m for the two sites.
Jean-Louis Appelmans, CEO:“The Austrian real estate market becomes for Leasinvest the third core market, representing a stable market where we can develop our strategy and seize real estate opportunities, that way creating a stable income with capital gain possibilities”.
Strategic divestment of Swiss portfolio
At the beginning of November 2014 Leasinvest Real Estate had acquired three shops situated in the periphery, located in Etoy, Villeneuve and Yverdon-les-Bains, all in the Vaud Canton, for an amount of €38.7m (CHF 45m), based on a gross initial yield of over 6%. At the beginning of October 2017 these same 100% let buildings were sold to an important Swiss private investor for a global amount of €41.3m (CHF 48m) on the basis of a gross yield slightly over 5%.
Before Swiss capital gain taxation and sales costs, the divestment of these three buildings results in a slight capital gain compared to the initial acquisition value.
Logistics portfolio in Belgium
As announced previously, an agreement for the divestment of three logistics buildings had been concluded, and three leaseholds were concluded in September and October 2017 on behalf of a German real estate fund for an amount of €60m. This related to buildings located in Wommelgem, Canal Logistics phase 1 and the SKF site in Tongres. The global value of the transaction is in line with the fair value defined by the real estate expert.
The building located Prins Boudewijnlaan in Kontich had been sold under a forward sales contract last June to a private Belgian developer for an amount of €12m. The sales proceeds will be received end December 2017, meanwhile, Leasinvest Real Estate continues to collect the rent of this 100% leased building.
Following these divestments, the Belgian logistics part will only comprise some warehouses located at the Riverside Business Park in Anderlecht (Brussels) and at Brixton Business Park in Nossegem/Zaventem, together with the State Archives in Bruges.
Leasinvest Real Estate will have divested €74m in 2017, or 65% of its global Belgian logistics portfolio valued at €111m (on 30/06/2017). The logistics percentage will drop from 14% (on 30/06/2017) to approximately 7%.
Jean-Louis Appelmans, CEO: “The focus on two assets classes, retail buildings in Luxembourg and Austria, and offices in Luxembourg and Belgium, is a source of value creation and strengthens our efficiency.”
Acquisition and lease in the Grand Duchy of Luxembourg
The four remaining shops of the shopping centre located in the city centre of Diekirch were acquired by our Luxembourg subsidiary Leasinvest Immo Lux SA for an amount of €0.8m, resulting in all commercial spaces currently being held by the latter.
The occupancy rate of our building Mercator situated Route d’Arlon in the City of Luxembourg, acquired last May, reaches 60% thanks to an additional floor let. Advanced negotiations with potential tenants are ongoing and are expected to be finalized by year-end in order to let the rest of the building.
Evolution of debt ratio
Taking into account the important investments and divestments announced of respectively €83m and €115m, Leasinvest Real Estate’s debt ratio should fluctuate between 57% and 59% by end 2017.
