Hamborner REIT already investing freshly-raised capital

The Duisburg-based Hamborner REIT has wasted little time putting its recent capital raise to good effect, immeditately closing on a deal to buy a retail centre in Fürth, near Nuremberg, for €31m.

The company is buying the Hornschuch-Center, a modern retail centre (Fachmarktzentrum) with around 12,000 sqm of lettable space in a top city centre location. The seller is a Memmingen property company.

The former Marktkauf property was built in 1990 and completely renovated and converted into a retail centre in 2014/2015. The centre opened in March 2015. The main tenant with around 4,000 sqm and a 17-year lease is food retailer Edeka. In addition, there are also Schuh Mücke, Rossmann, Norma and other smaller tenants in the property. The average remaining term of all leases is 12.5 years, while the gross initial yield is 6.1%.

Earlier in July Hamborner raised gross proceeds of €101.6m by placing an additional 12m shares, raising the share capital from €50m to €62m. Shareholders subscribed for 71.7% of the shares offered in the rights issue. The company had said it planned to use the proceeds principally "to finance acquisitions of additional properties in accordance with its corporate strategy."

Hamborner became a REIT in 2010, at the time the fourth German company to join the REIT ranks. At the end of Q1 this year the company's portfolio was valued at €745m, with an overall LTV of 43.3%. It focuses on high-yielding commercial properties, mainly retail space, offices and medical centres in key city centre sites in large and mid-sized German cities. Rental income last year amounted to €46.82m, while the company earned FFO last year of €24.55m, and booked a net profit of of €17m.