Greenman expands retail holdings with developer framework agreements

It’s been a busy couple of months for German food-retail real estate fund manager Greenman, whose Greenman OPEN fund is investing a further €46m to buy seven new supermarket properties.

The deal is part of a framework agreement with developer Schroder Holding, and will see Greenman taking delivery of the assets between 2021 and 2023. The seven assets are located in eastern Germany and are pre-let to supermarket chain Edeka on 15-year leases.

We’ve reported in the past on Greenman OPEN’s framework agreement with developer Schoofs Immobilien, which was its first framework agreement, signed in June last year, and comprising three assets covering 30,000 sqm for €95.5m.

As part of that agreement, In December, Greenman OPEN bought a mixed-use hybrid centre in Tuttlingen, in Baden- Württemberg. It paid €32m for the development, which will be completed in summer 2021 and anchored by grocers Rewe and Aldi on long-term 15-year leases. For the first time, Greenman is buying an asset that contains a residential element – in this case 70 apartments – in line with a general trend across Germany to increase housing density, including building above retail outlets, particularly the traditional one-storey supermarket.

For financing the deal, Greenman agreed a new debt facility with Wüstenrot Bausparkasse, which has already financed several assets for Greenman.

According to James McEvoy, Greenman’s head of acquisitions, the latest agreement with Schroder Holding is an integral part of Greenman’s strategy to strengthen and maintain its investment pipeline while assuring the high quality of assets in the Greenman OPEN fund.

“During the pandemic, the resilience of food retail and other essential retail-anchored assets has resulted in heightened interest in the sector from domestic and international investors, which means it has become more important than ever for us to leverage our market experience and extensive relationships with developers to access off-market deals. Entering into framework agreements such as this one with Schroder and the recent agreement with Schoofs last year, allows both sides to better achieve forward planning and pricing security,” said McEvoy.

The latest framework agreement with Schroders along with that with Schoofs, is likely to see Greenman OPEN hit the €1bn assets under management milestone for the first time.

In November, Greenman made its first investment in a technology business, taking part in the latest fundraising round for Irish-based drone delivery business Manna. The tech company is currently trialing its drone delivery service in a suburb of Galway, on Ireland’s west coast, where it is delivering goods such as food and pharmaceuticals to the local community within a three-minute window.

The plan is to leverage Greenman OPEN’s real estate, tenants and partners in Germany to put together a pilot project in Germany to offer drone services this year.

Currently, 0.5% of all grocery transactions in Germany take place in a Greenman OPEN-owned store, which Greenman says means it’s well placed to prepare and plan for the future and become a leading voice in the discussion on the future of grocery retail in Europe.

Greenman’s Ronayne O’Mahony, Director of Expansion, commented: “We continue to believe that bricks and mortar will be a vital component of food retail; however, there are a number of new and emerging technologies that will complement and enhance the uses of these sites and the experience for consumers. Our knowledge of the food retail sector and unique proprietary information places Greenman in an excellent position to be pursuing investments that will shape the future of food retail.”