CBRE Global Investors made its first German acquisition for one of its funds when it teamed up with pension fund the Teachers Retirement System of Texas (TRS) earlier this month to buy the prominent Leine Centre outside Hanover for €117m. The net initial yield was about 6.0%.
The shopping centre, located in Laatzen not far from the famous Hanover fairgrounds, was acquired from LaSalle Investment Management, ADLER Immobilien Investment Gruppe, Fay Projects and THI Holding & Co. The centre was originally opened in 1973 and then recently extended in 2011. It has 28,200 sqm of space with nearly 100% occupancy, and its 101 units are let to well-known retailers such as H&M, Deichmann, Expert, DM Drogeriemarkt, Adler and Douglas.
Florencio Beccar, responsible for the fund at CBRE Global Investors, said: “Germany is among the most stable and strongest economies in Europe. This acquisition provides exposure to a country where we anticipate that economic growth will continue to be above trend. Germany is the largest retail market in Europe in terms of sales, but it is under-retailed in terms of shopping centre gross lettable area (GLA), which contributes to high occupancy and rent sustainability.”
Beccar added that the asset met the fund’s investment strategy, providing a high income yield with rental growth potential as lease renewals are implemented within the hold period.”