Hammerson plc has exchanged unconditional contracts on the sale of a portfolio of seven retail parks to Orion European Real Estate Fund V. It is the largest UK retail parks portfolio sale in the past decade.
The headline price of £400million is subject to an adjustment for rent-free periods and rental guarantees, so the transaction is expected to generate net proceeds of £395million.
This transaction is the largest UK retail parks portfolio sale in the past decade. The sale follows Hammerson’s strategic decision, announced in July 2018, to exit the retail parks sector over the medium term to create a focused portfolio of flagship assets, premium outlets and City Quarters across major European cities.
The seven asset portfolio of UK retail parks comprises 205,000 square meters of space which generates a net rental income of £36million per annum.
The parks included in the largest UK retail parks portfolio sale are:
- Central Retail Park (Falkirk)
- Cleveland Retail Park (Middlesbrough)
- Cyfarthfa Retail Park (Merthyr Tydfil)
- Elliott’s Field Shopping Park (Rugby)
- Forge Shopping Park (Telford)
- Ravenhead Retail Park (St Helens)
- The Orchard Centre (Didcot)
The total sale price of the largest UK retail parks portfolio sale represents a net initial yield of 8.9% and is 22.8% below the last reported book value as at 30 June 2019.
Other retail park sales
Separately, Parc Tawe, Swansea and Abbey Retail Park, Belfast have been sold individually generating proceeds totalling £55million. Combined with the largest UK retail parks portfolio sale in the past decade, it totals £455m and represents a net initial yield of 8.7%, with a discount to a June 2019 book value of 22.2%.
In total, Hammerson has sold 14 retail parks since July 2018, generating sales proceeds of £764million to reduce the Group’s debt and further strengthen the balance sheet. The group has an interest in one remaining retail park, Brent South, part of the Brent Cross estate, which is held in a joint venture with Aberdeen Standard Investments and is marked for sale.
David Atkins, Hammerson’s Chief Executive, says, “Against a challenged retail and investment backdrop we have exited the retail parks sector. Having achieved disposals of close to £1billion since the beginning of 2019, our focus remains on strengthening our balance sheet to create further resilience. The completion of this strategic disposal enables us to create a more concentrated portfolio of flagship venues, premium outlets and City Quarters which we expect will deliver greater levels of both income stability and growth over the medium term.”
Hammerson was advised by Morgan Stanley and Herbert Smith Freehills.
Iconic Umspannwerk Kreuzberg sold for over €70m
European property investment firm and asset manager Avignon Capital, has completed the sale of Umspannwerk Kreuzberg in Berlin to RFR Holding for more than €70m.
Built in 1926, Umspannwerk Kreuzberg is an 11,500 square metre multi-let, office building in Berlin’s ‘hipster’ neighborhood of Kreuzberg.
Avignon acquired the iconic building in 2015 and reconfigured underutilized space, rebranded and improved rentals. It has achieved 100% occupancy with a diverse tenant mix including Red Bull Music Studios and Coya.
Patrick Flaton, Chief Executive Officer at Avignon Capital says, “We are pleased to have completed the sale of Umspannwerk Kreuzberg following the conclusion of the five-year business plan.
“Avignon recognized the upside potential in the property as well as the location and our asset management strategy over the hold period has driven the performance and enhanced the building’s presence in the Kreuzberg suburb.
“We have exceeded our business plan targets and delighted with the value growth and returns we have delivered to our client.
“With low vacancy and strong occupier demand, the Berlin office market remains attractive to us and we hope to invest more over the next year.”
Dr Alexander Koblischek, authorized signatory of RFR Holding GmbH says, “To buy this unique building and property for RFR has only been a consequent step with regard to our real-estate portfolio in Berlin.”
Avignon was advised by BCLP, Warth & Klein Grant Thornton and RFR was advised by Celexis and Hauck Schuchardt.
€14 million logistics park investment
Urbano Parks, a group of developers from Cluj-Napoca, announces the construction of the Urbano Cluj Vest logistics park (UCV).
So far, the estimated value of the investment for the industrial park amounts to €14 million. The Urbano Parks investor group consists of Mircea Ilea, Alexandru Serban and Daniel Paraschiv.
The logistics warehouse is in the Florești – Gilău area, with direct access to DN1, near the Gilău node of the Transylvania Highway (A3), 15 km away from Avram Iancu International Airport. Urbano Vest Cluj will have a built area of 24,500 square meters, Class A and 5 hectares of park area.
Daniel Paraschiv, co-founder of Urbano Parks, says, “Part of our development strategy, we aim to be with our partners, but also to contribute to supporting local infrastructure and development, by generating new jobs closer to home for the residents of the Floresti – Gilău area.”
The first phase is planned be delivered in the spring of this year, and the second phase of the project has already begun. The Urbano Vest Cluj project is set to reach full capacity later this year.
Once completed, the logistics warehouse will offer flexible rental options with areas between 1,152 and 7,488 square meters. The first tenants with which the contract was signed are Englmayer and Schuller Eh`Klar, which rented over 4500 square meters of office, technical and sanitary spaces, and storage spaces, thus facilitating jobs for 45 employees, in a first phase.
Cristian Grama, Managing Director of Operations, Englmayer Romania, says, “We chose Urbano Vest Cluj because it presented a great flexibility from the first moment of the discussions, following very carefully the complete satisfaction of our needs.”
The Reflector office building fetches €153m
Deka Immobilien has bought The Reflector office building from Hanover Quay Property Development Company for a headline price of €153million.
Deka Immobilien is further expanding the start portfolio of the new open-ended retail property fund Deka-ImmobilienMetropolen.
The Reflector, which was completed in April 2019, comprises around
11,500 square meters of flexibly divisible space and 34 parking spaces. It
is 100% rented to four users on a long-term basis, with Airbnb being the main
The property is located in the Docklands area of Dublin near the Grand Canal Dock. In the past 15 years, this location has become the most popular office area for tenants who are looking for large areas in new buildings. It is certified with the Leadership in Energy and Environmental Design (LEED) Gold standard.
The new fund is aimed exclusively at private investors and is intended to invest in currency-protected commercial real estate in dynamically growing metropolises worldwide. The target investment markets are selected using a city selection model that is geared towards long-term growth drivers – globalization, urbanization, ecology and new working environments.
The start portfolio will soon be expanded with a third investment.
Student Housing Fund II expands portfolio
SPAIN, FRANCE & AUSTRIA
Berlin-based Catella Residential Investment Management (CRIM) has significantly expanded the Catella European Student Housing Fund II (CESHF II) portfolio.
It has made three acquisitions of student residences in Austria, France and Spain totalling €55 million.
Following the transactions, the fund has an investment volume of approximately €100 million in four European countries since the Fund’s launch in September 2019.
CESHF II is the successor of Catella’s first European Student Housing Fund which has generated a net internal rate of return (IRR) of more than 7% a year since its launch in 2013.
Alexander Brüning, Fund Manager at CRIM, says, “Student housing has increasingly developed into an established asset class in the last 10 years and our first pan-European student housing fund has enabled us to deliver strong annual returns for our investors. Education is becoming an economic factor worldwide, and the number of students, both nationally and internationally, continues to rise significantly. Across Europe, roughly only 10% of students have access to a dedicated student apartment. Affordable dorms in good locations therefore offer investors stable, largely anti-cyclical returns.”
In Austria, CESHF II has bought an eight-storey building comprising a rentable area of 5,622 square meters in Linz, an important university location and the state capital of Upper Austria, from a local entrepreneur. Dating from 2015, the property comprises a total of 224 rooms or 129 apartments spread over eight full floors excluding the basement. With 206,895 inhabitants, Linz is the third largest city in Austria after Vienna and Graz and the centre of the second largest agglomeration in the country with a population of 789,811. The city’s universities, educational institutions and technical colleges offer an extremely broad range of courses which attracted around 24,000 students to the city in the 2018/2019 winter semester.
In France, the Fund has acquired a property from the developer IMODEV with a rentable area of 4,757 square meters in Évry, about 25 km southeast of Paris, for around €20 million from a well-known project developer. The building comprises a total of 242 student apartments, largely one-person studios, spread over the upper eight to 10 floors. The complex represents the future generation of student housing concepts with several common rooms, a cafeteria, cardio workout rooms, co-working spaces and a reception with a lounge. In addition, the property boasts a 143 square meter terrace, a 500 square meter community garden, an inner courtyard and 87 parking spaces. Évry is the largest municipality in the Île-de-France region with almost 700,000 inhabitants and several well-known universities. The complex will be developed and managed by Sergic Residences and located within a 10-minute walk from the main university, close to a shopping centre and a railway station with a RER D regional link to the centre of Paris.
In Seville, the Fund acquired a property with 196 student apartments for 211 beds comprising a total gross floor area of 5,132 square meters above ground, divided over five floors, for around €15 million from a well-known local project developer. The majority – or 181 – of the apartments are individual rooms and the complex offer also a 60 square meters fully-equipped roof terrace, an exterior common swimming pool and 32 parking spaces located in the underground garage. Seville is the capital of the southern province of Andalusia and, with almost 700,000 inhabitants, the fourth biggest city in the country after Madrid, Barcelona and Valencia. Seville is also one of the leading university cities in Spain with four universities and approximately 75,000 students.
Alexander Brüning, who recently joined CRIM as Fund Manager, has many years of experience in management positions in the investment and real estate industry, as well as in advising institutional clients. He has specialised in real estate mandates for wealthy private clients, foundations, family offices, insurance companies, pension funds and pension funds. Before joining CRIM, he worked for the German subsidiary of Italian insurer Generali, French insurer Société Générale Group and as managing director of a Hamburg-based project developer and special fund initiator. Most recently he served at the GBI Group as a consultant.
Consorto publishes a round-up of CRE deals each week