Pramerica and QInvest buy 16-property German retail portfolio

Pramerica Real Estate Investors and QInvest, Qatar's leading investment bank, have bought a portfolio of 16 retail properties located across Germany through a newly formed joint venture. The seller is a joint venture of Hahn Group and Indigo Invest, but the terms of the deal were not disclosed.

The acquisition includes 16 multi-tenant retail assets anchored by major grocery and home improvement retail outlets, comprising more than 140,000 square meters across Germany. The shops, retail parks, home improvement stores, and supermarkets in the portfolio are located across North Rhine-Westphalia (5), Lower Saxony (4), Bavaria (3), Saxony (2), Baden-Württemberg (1), and Brandenburg (1). Anchor tenants include Rewe, Edeka, Kaufland, and Real.

Hahn and Indigo had bought the package at the end of 2012 for around €140m. Since then, the properties have been modernized and newly rented within the framework of a “manage-to-core” strategy. Pramerica will act as the portfolio and asset manager for the properties.

"The acquisition provides investors with access to long-term income returns through strong underlying leases with major German retailers in proven, diversified, regional markets,“ said Sebastiano Ferrante, head of Germany for Pramerica (which itself is a unit of giant US insurer Prudential).

"The transaction provides us with higher yielding exposure with value add upside secured by defensive assets in one of the more robust EU economies,“ said Craig Cowie, head of real estate at QInvest. "We intend offering equity to our shareholders and clients as part of our ongoing initiative to offer value add returns to all stakeholders.“

The Qatari group's strategy is to invest opportunistically and 'sector-agnostically' in junior financing and equity in the US and Europe in core, value-add and even greenfield developments.

Qinvest, whose shareholders include Qatar Islamic Bank, is an investment bank based in Qatar that describes itself as playing a “key role in the Emirate's international investment plans.”

Pramerica now manages more than €700m in German retail property assets on behalf of investors. Worldwide it manages $61.5bn of assets across the whole risk spectrum. On this latest German deal, Pramerica said it was an extension of its strategy to capitalise on strong performance in the basic needs sector in Europe, including grocery and home-improvement anchored projects.