RDI sells Berlin shopping centre to Benson Elliot
RDI REIT has sold its Schloss-Strassen Center in Berlin for €65.5m (£58m) to fund manager Benson Elliot, as part of its long-held plans to withdraw from Germany.
The deal for the shopping centre reflected a 6.6% net initial yield, assuming purchaser’s costs, and a 16% discount to February book values. Hamburg-based asset manager Modulus Real Estate has additionally taken a minority stake in the deal.
The 200,210 sq ft centre produces net rental income of approximately €4.7m per annum (£4.2m), and is anchored by Primark and Rewe. Other tenants include Contipark, Smyths Toys and Fitness First.
RDI REIT has sold its Schloss-Strassen Center in Berlin for €65.5m (£58m) to fund manager Benson Elliot, as part of its long-held plans to withdraw from Germany.
The deal for the shopping centre reflected a 6.6% net initial yield, assuming purchaser’s costs, and a 16% discount to February book values. Hamburg-based asset manager Modulus Real Estate has additionally taken a minority stake in the deal.
The 200,210 sq ft centre produces net rental income of approximately €4.7m per annum (£4.2m), and is anchored by Primark and Rewe. Other tenants include Contipark, Smyths Toys and Fitness First.
RDI said the deal has reduced the group’s overall retail exposure to 24.1% on a pro forma basis, compared with 28.4% in February, and removes “a near-term refinancing requirement” that would have required the contribution of additional equity into a sector it is seeking to reduce its exposure to.
Mike Watters, chief executive at RDI, said it has €50.5m of properties remaining in its German portfolio, which are at “various stages of negotiation”.
Watters said: “The sale of the Schloss-Strassen Center in Berlin is in line with our stated strategy to reduce RDI’s retail exposure and focus the portfolio on core assets in the UK market while strengthening the balance sheet.”
Benson Elliot said it plans to reposition the centre by consolidating its grocery and convenience offering, optimising tenant composition, reconfiguring space and re-gearing lease terms.
The acquisition takes Benson Elliot’s German convenience retail holdings to about €250m.
Joseph De Leo, senior partner at Benson Elliot, said: “We continue to see long-term value in market-dominant, needs-driven retail formats.
“While the structural trends underpinning the retail sector have no doubt accelerated over the past few months as a result of the enforced lockdown, the benefits of grocery-anchored centres, which remained open because of the community services they provide, were also accentuated.
“This property is in a high-footfall location and we believe significant value can be created by refining its offer. Moreover, in a low-interest-rate environment we are confident that investors will continue to favour the stable cash flows offered by grocery-anchored formats in fast-growing, supply-constrained locales, let on sustainable rents to strong covenants.”
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