The International Valuation team at King Sturge completes ‘Reality Portfolio’
28 January 2008
Hypermarkets throughout Germany
The International Valuation Team based in London in association with the Belgium and Czech valuation teams has just completed the valuation of ‘Reality Portfolio’ comprising twelve hypermarkets, located throughout Germany, all let to REAL.
The portfolio which comprises a total floor size of 158,040 m² was purchased by Israeli property company Delek Global Real Estate for a purchase price in the region of €250 million. The property deal was financed by German bank SEB and reflected a net initial yield of approximately 6.0%.
At approximately €38 million, the property in Heidenau, in the state of Sachen, is the largest single asset, whilst the property in Freiburg in Baden Württemberg ranked second at approximately €33million. Together, these comprise almost 28% of the portfolio value. The smallest single asset is Raunheim in the state of Hessen at approximately €11.7 million.
More than one third of the value of the portfolio is located in the state of Hessen (35.5%), whilst Sachsen accounts for 15.05%, Baden Württemberg for 13.05% whilst the remaining 4 states account for 36.44% of the total portfolio value.
The weighted average unexpired lease term is 13 years 11 months and 20 days.
The deal which was the first major valuation instruction completed post credit crunch and demonstrates the continuing attractiveness of the German retail market for overseas buyers looking for secure long term income to strong covenants. With increasingly stringent planning regulations for out-of-town retail developments in Germany coupled with the stronger performance of the German economy, the deal represented an excellent purchase.
