Only a few short years ago it seemed that Australian investment companies, desperate to find yield on real estate outside their saturated domestic market, were spearheading the drive into German residential and commercial markets, with or without local partners, but fearlessly buying whatever they could get their hands on. Our reporting on Australian companies in the past couple of years has, sadly, been largely restricted to tales of their winding-up, disposals and departure.
So it is, too, with Melbourne-based listed investment manager APN Property Group, which has now sold all its German assets from its largest European fund, itself in the process of being liquidated. With three other funds part-invested in Vienna, Poland and Greece due to reach maturity within six months, it’s almost certain the group will imminently depart from the European arena altogether.
Over the last twelve months APN has sold off all its German assets, including two shopping centres and seven large furniture stores. We reported in recent issues of REFIRE on the sale of the 45,000 sqm Löwen-Center in Leipzig to Rockspring for about €37m, and of the 31,000 sqm Neustadt-Center in Halle to a joint venture between Curzon Capital Partners and Pamera for €31m. The seven Roller furniture stores – big box warehouse-style buildings, located mainly in the east but also one each in Krefeld and Dortmund – were sold as a package to two unnamed investors.
The APN European Retail Property Group fund was officially de-listed last September after an agreement made the previous year with the fund’s largest creditor, the Royal Bank of Scotland, to dispose of all the assets within 20 months.
Meanwhile, the long-established Dahlke Immobilien, based near Moenchengladbach in North Rhine-Westphalia, has set up a new company called Sunshine Real Estate GmbH in its home town to act as the platform for a new portfolio of German commercial and big-box store properties for an Australian family office moving into the German market. The company has already acquired an autobahn service station between Heilbronn and Nuremberg, with a retail project development near Hannover also secured as part of a two year roll-out.
Separately, SEGRO plc, the UK industrial property REIT, completed a wave of disposals including several regional UK industrial estates by making the first of a number of large non-strategic asset sales in Europe. This involved selling the 155,000 sqm MPM engineering and manufacturing facility in Munich for about €53m to a private German investor.
SEGRO had originally bought the asset as part of a sale-and-leaseback deal with industrial group Krauss Maffei (formerly MPM Mannesmann Plastics Machinery) in 2007. The deal involves a commitment by SEGRO to manage and fund a roof refurbishment programme at the facility throughout this year, which is expected to cost €6m. Including rental top-ups, and based on the disposal price, the combined net initial yield on the deal is just over 8.0%, said the company. Of three further assets in continental Europe valued at €175m to go shortly on to the block, the most prominent is probably the enormous Neckermann building in the eastern part of Frankfurt, formerly headquarters of the eponymous mail order company, now defunct.