Agribusiness group BayWa in €235m sale-and-leaseback deal

UniCredit funds subsidiary WealthCap has concluded a further two portfolio deals with agribusiness and building materials wholesaler BayWa to acquire assets for new funds which it is setting up for institutional investors. BayWa will lease the assets back in a sale-and-leaseback transaction, valued at €235m.

The deal follows on the sale (and subsequent leaseback) of BayWa’s Munich tower block headquarters for €80m to its own project development joint venture with Munich-based investment company Competo Capital Partners at the end of last year. The latest transaction with WealthCap involves property assets at 79 different locations in Germany covering a total of 1.2m sqm. All the lease agreements with BayWa are for “well over ten years” duration, according to BayWa.

The first portfolio consists of five DIY centres and 40 building materials outlets with a total lettable area of about 700,000 sqm, while the second consists of about 490,000 sqm of lettable space across 34 technical workspaces, agribusiness operators and mixed agribusiness and building material trade venues.

The bulk of the properties are in Bavaria, BayWa’s heartland, but others are in North Rhine Westphalia, Saxony, Baden-Württemberg, Rhineland Palatinate and Thuringia. A third portfolio is currently being negotiated between the two parties, which if successfully concluded (probably in early April), will see BayWa having sold 14% of its total lettable space.

According to BayWa CFO Andreas Helber, “We are trying to avoid holding debt in our core business for investments in the property portfolio. We will use the earnings from the real estate sales to pay for the major agribusiness acquisitions we made last year.”

WealthCap was created in 2007 in a merger of three of UniCredit’s former fund initiators Blue Capital, HFS and HVB FondsFinance. It has since issued 131 funds in total and placed nearly €7bn in equity. On the BayWa deal the firm has hardly commented, preferring to wait for financial watchdog BaFin’s all-clear on the deal before determining the final structure of the fund setups, target markets and allocations. According to spokesman Hubert Silberhorn, “Given the new regulatory environment, we’re looking at our options under the AIFM and KAGB regimes, but as it stands the likely format is likely to be that of KG (Kommanditgesellschaft, a form of partnership under German company law).

UniCredit has largely been a fund initiator for retail funds, but may consider establishing funds more suited for institutions under the new regulations, it said.