VIB Vermögen tops 100-property mark in steady expansion

VIB Vermögen AG, a specialist in developing and managing commercial real estate for mid-sized companies in southern Germany, has been chugging along steadily for the last number of years, enjoying a somewhat lower profile than many of its German listed peers.

But, like many of them, it too has seen a quintupling in its share price in the big run-up of the past three years as it steadily builds up its portfolio and deepens its relationships with its tenants in the prosperous state of Bavaria, with a scattering of other regional holdings.

The company now has 100 properties with nearly 950,000 sqm of lettable space, a vacancy rate of only 2.9%, and annualised rental revenue of €61.3m.

Last December the company issued a €33.2m two-year mandatory convertible bond which was placed with institutional investors, paying a 4% coupon. At the time, Ludwig Schlosser, VIB Vermögen’s CEO, said the company was in negotiations on some promising properties for which it intended using the bond proceeds.

The company, headquartered in Neuburg an der Donau, has now indeed further expanded its portfolio with the purchase of a retail park in Neu-Ulm on the Baden-Württemberg/Bavarian border, and the transfer to its portfolio of a MAN service station that it had developed itself.

In the Neu-Ulm retail park, much of the property has been completely modernised and remodelled, with new contracts for a 15-year period in place for two-thirds of the rental area. The total lettable space is 18,740 sqm and the asset will generate a 7.6% rental return on an investment of €14.8m. Main tenants include pet food store Fressnapf, Sparda Bank, artists supply store Bösner and agro-energy business BayWa.

Board member Martin Pfanzelter commented, “This location is very well established on the market and has a very good visibility in the strong economic region of Southern Germany. Given the long-term rental contracts, this retail park fits ideally into our portfolio.”

VIB Vermögen also transferred its fourth MAN service station, a property which the company had developed itself in Freiburg-Umkirch, to its portfolio in early February. The service station has been generating rental income since February 1, 2015, yielding a7.4 %. The total investment was € 7.5m, with the rental contract agreed for a duration of 20 years.