Canada's Inovalis buys ex-RTL property in Cologne

Canadian REIT Inovalis has agreed to buy an office property in the German city of Cologne for €22.7 mln. The asset was acquired on a 50-50 basis from project developer Pandion with listed Kuwaiti investment partner, Injazzat Real Estate Development, and represents a 5% entry yield for Inovalis.

Completed in 2015, the property provides 6,090 sqm of leasable area over five storeys and 111 parking spaces. Previously known as the site of media group RTL, it is now fully let through 2025 to the French property technology and energy company Cofely, with no break option.

The acquisition will be financed with a combination of €13.7m of senior mortgage debt and equity from both parties for a total of €9m, and the deal is expected to close in the fourth quarter.

The Toronto-listd Inovalis REIT was specifically set up in 2013 to invest in French and German office properties. After this deal, the company's tenth, Inovalis rental revenues will come 21% from Germany and 79% from France, from assets with more than 96,000 sqm. The Kuwaiti group Injazzat was set up by a group of entrepreneurs in 1998 and floated on the Kuwaiti stock market in 2002.

According to David Giraud, CEO and co-founder of Inovalis, "This property is the tenth acquisition by the REIT since its inception and the fourth completed on a partnership basis. In the context of historically low interest rates in Europe, we continue to see similar investment opportunities in the REIT’s targeted European markets, and we will keep on doing our best to capture them in our unitholders’ best interest."