Listed WCM buys further €98m retail portfolio at 7.7%

The listed, Frankfurt-headquartered WCM Beteiligungs- und Grundbesitz AG has been steadily and consistently rebuilding its base since its operative relaunch in 2014 as an effectively new company with several years of loss carry-forwards and tax credits to its name.

The company has added to its recent list of acquistions by buying a further three retail centres totalling 88,000 sqm for a net purchase price of €98m. Along with the four retail centres in its September buying spree for €66.5m at a yield of 6.7%, the company said the latest transaction will markedly boost its FFO and NAV.

In the latest deal, the centres are located in the federal states of Baden-Wuertemberg and Saxony-Anhalt and are all anchored by a leading food retail chain. The newly acquired portfolio has a vacancy rate of 7% and generates annual rental income of around €7.6 mln. The implied gross initial yield is 7.7%.

The acquisition is set to be financed via a combination of cash and debt, with the deal closing in the first quarter of 2017.

The transaction boosts the value of WCM’s portfolio to around €766m and the annualised rental income to €46m. The annualised FFO is €25.5m.

The company's weighted average lease time (WALT) of WCM’s pro forma portfolio amounts to 8.5 years with a EPRA vacancy of 4.7%. Including the acquisition announced by press release on 27 September 2016, which is expected to close this year and the announced acquisition today, the management of WCM expects the EPRA NAV/share to rise to a minimum of EUR 2.85. The pro forma average cost of debt is anticipated to be below 2.0% with an average remaining maturity of over 6 years.

Frankfurt-based WCM focuses on office and retail properties in the major office locations in Germany. The company has been listed in the SDAX segment of the German stock exchange since 21 December 2015.