Redefine acquires Leopard control
Redefine International, the FTSE 250 real estate investment trust, has agreed to acquire control of the German Leopard retail property joint venture for €49m.
Redefine International, the FTSE 250 Real Estate Investment Trust (REIT), has agreed to acquire control of the German Leopard retail property joint venture for €49m.
Redefine International, which already holds a 50% stake in company, is trying to cement its presence in Western Europe by investing in premium rather than fringe assets.
The group’s CEO, Mike Watters, said the company had done well in the UK and Germany and would continue to focus on those areas.
“In line with our strategy, this transaction represents a good opportunity to recycle capital into assets which generate a strong income yield, having sold the VBG portfolio of German offices at an 8.6% premium to book value. Furthermore, our controlling interest in the portfolio will provide more flexibility over future asset management initiatives and reinvestment decisions,” said Watters.
Redefine International would now hold an effective 94% controlling interest in the portfolio, while providing 100% of its nonbank financing requirements by way of shareholder loans. The Leopard portfolio comprises 66 German retail properties generating gross rental income of €13.9m. The portfolio has been valued at €175.5m, reflecting a net initial yield of 7.4%.
Deputy CEO Stephen Oakenfull said 86.4% of the properties were in western Germany and in Berlin, which are typically that country’s strongest economic locations.
Meago Asset Management director Anas Madhi said Redefine International’s decision to take control of the Leopard portfolio was a smart move.
“The proposed 90% to 95% payout … is intended to provide [the firm] with greater financial flexibility, especially as [it seeks] to reduce [its] gearing to below current levels, which are circa 53%,” he said.