Metro bundles 10-asset hypermarket portfolio into new JV

The DAX-listed Metro Group has sold a large chunk of its so-called Socrates portfolio of 10 Real hypermarkets throughout Germany from its property arm to a new joint venture, in which it will retain a 40% stake. The 60% JV partner is Berlin real estate group Carlton, itself a joint enterprise between Hildesheim-based company group Lüder and Berlin-based Jan Wehle.

In a statement Metro said, "The objective is to sustainably boost and enhance the attractiveness and footfall of the retail stores that are of strategic importance to Real through the gradual renovation and development of the properties."

Metro re-acquired the assets in 2014 from Israeli group Delek, having previously owned them, after subsequently revising their estimate of the assets' potential with a collaborative partner. The low-margin Real subsidiary of Germany's largest retail group is currently undergoing a root-and-branch restructuring programme.

Jürgen Schwarze, Metro Properties' CFO, commented, "When we addressed the projected resale more closely after reacquiring the properties, we soon realised just how much potential the individual stores offered for increasing attractiveness and value. To achieve optimum leverage of this potential, apart from solid financing, an experienced project developer was also required who contributes the specialised competence and drive to reposition large-area retail real estate."

The 10 Real hypermarket assets are in Bremerhaven-Pferdebade, Castrop-Rauxel, Gross-Gerau, Darmstadt, Freiburg (Gundelfinger Strasse), Heidenau, Würzburg (Nürnberger Strasse), Wetzlar, Raunheim and Wiesbaden (Mainzer Strasse). They are all leased long-term to Real.

The Lüder group of companies is a project developer that operates across Germany and specialises in the development of large-area retail. Prominent recent projects handled along with partner Wehle include the Planetencenter in Gabsen, Lower Saxony, and the Mainspitze shopping centre in Raunheim near Frankfurt.