Rockspring tops €850m year with major retail acquisitions
The London-headquartered Rockspring Property Investment Managers finished off a year of major acquisitions in Germany by buying a portfolio of nine Obi retail stores on behalf of two separate account mandates, for a total price of €150m. The seller is an English investment group who bought the assets in a sale-and-leaseback in 2006/07 after Obi had built them.
It's one of the biggest deals in the German DIY market since the heady days of free-wheeling dealmaking in the years 2004-2007, when several portfolios were bought and sold in the sector, culminating in the collapse and closure of the Praktiker/Max-Bahr chain.
The deal involves sale-and-leaseback transactions with Obi, now the leading German DIY operator, who remain the tenant in the nine properties. The stores cover 120,000 sqm of lettable space including the 20,000 sqm Obi flagship sotre in Berlin-Zehlendorf. Along with another major store in Berlin, the properties are in Augsburg, Neuss, Siegen, Haiger, Schwelm, Vechta and Dresden. The stores have an average remaining weighted average lease term of seven years.
Rockspring veteran Stuart Reid, as the partner with responsibility for the German market, commented on the deal. "This is a highly desirable, well-located portfolio that we have monitored for a number of years. The units, which were originally built by Obi, are situated in strong retail warehouse municipalities and are dominant in their catchment areas. Rockspring's platform of retail warehousing in Germany and Switzerland now amounts to over €2 billion, which incorporates over 100 retail units, making Rockspring the largest long term foreign investor in this sector.“
In a follow-up deal in January, Rockspring bought an 18,500 sqm retail unit in Rangsdorf, a commuter town south of Berlin on the Berliner Ring Autobahn, and well placed for the opening (whenever that happens…!) of the new BER international airport.
The property, which is let to furniture retailer Roller Möbel, abuts the highly-frequented Südring Center retail warehouse park which Rockspring bought in September last year. Bought on behalf of the same separate account mandate for €15 million, the newly acquired asset increases the value of the combined holding to over €75 million.
Again, Stuart Reid explained the rationale behind the deal. "This transaction marks our tenth major strategic investment into dominant retail warehouse investments in the region's strongest catchment areas."
“We are seeing a clear trend in the region of rising tenant demand for the best retail shopping centres and, alongside this, increasing institutional appetite for such stock. Rangsdorf is located in Berlin's improving southern commuter belt and we have a number of immediate and medium term plans for improving the tenant mix and profile of the centre."
Reid said that, all told, Rockspring completed €850m in transactions in Germany last year (€700m were acquisitions, while €150 were disposals), and this year will target the country’s logistics and office property, as well as further retail warehouses.
Transactions last year continued to focus on the retail warehouse sector in Germany, totalling forty separate assets, with the acquisition of a €350m portfolio of 23 out-of-town assets from a JV between London-listed malls group Capital & Regional and a real estate fund managed by listed LA-based wealth manager Ares. It saw increases in both pricing and institutional demand. Rockspring is now the biggest long-term foreign investor in Germany in the retail warehouse sector.