The French-Dutch group Unibail-Rodamco, Europe’s largest publicly-listed real estate company, took a huge leap from effectively a standing start to gain a major presence in the German market by buying a majority stake in Germany’s second-largest shopping centre operator mfi AG.
The move continues Unibail-Rodam-co’s stated strategy of concentrating on large European shopping centres, while shedding smaller centres with limited upward rental potential, and entering European markets where it has had little or no presence to date.
In a double-pronged move into Germany, the group signed an agreement with private equity investor Perella Weinberg’s Real Estate Fund I to pay €297m for a 51% stake in the holding company which owns mfi Management für Immobilien, Germany’s second-largest owner and developer of shopping centres. The price puts a total enterprise value on mfi AG of €1.1bn, including assumed debt, equating to a net initial yield of 5.5% and an average price of €4,636 per square metre for the standing assets.
Unibail-Rodamco is also paying €86m for a 50% stake in the prominent Ruhr Park shopping centre in Bochum, one of the largest in Germany, reflecting a net initial yield of 4.8% and representing an asset value of €190m. This reflects a net initial yield of 4.8% and an average price per square metre of €3,435.
The total value of underlying real estate assets covered by the deal amounts to €1.5 billion, with a further estimated development pipeline of €530 million. It encompasses 6 current and 4 future shopping centres, with a total lettable area of nearly 610,000 m2. mfi also manages a further 20 centres for third parties.