The recently-established Mondial KAG has been busy bundling together a €150m portfolio of convenience stores and discount grocer/retailers, and says it is planning further investment of the same amount for its first retail Spezialfonds.
The portfolio of the Special Fund mondial retail funds DI (mondial nahversorgungsfonds DI) holds 20 assets in what the firm terms “robust” B-locations in Hamburg, Kiel, Flensburg, Hanau, Geltendorf and Altötting, the latter two near Munich.
The biggest asset is a neighbourhood shopping centre that evolved from a conversion from an ex-US military base in Hanau near Frankfurt am Main, called Argonner Markt. Seven of the assets in northern Germany were sold to the fund from the Itzehoe-based May Gruppe. All assets are leased long-term to retail tenants such as Rewe, Edeka, Co-op and Lidl with an average remaining lease term of 13 years, and have an occupancy rate of 99%. (The existence of a food retailer as anchor tenant is a key investment criterion). The current annual pre-tax dividend for investors is well above 6.5%, says the Munich-based Mondial.
“Via our German-wide network and the long-term experience of all colleagues, we were able to carry out many deals a lot faster than other competitors that have just entered the market,” said CEO Michael Vogt who founded Mondial at the beginning of this year. “So far we’ve made all our acquisitions with our own equity capital, and are successively financing the assets.”
The company does not participate in expensive bidding processes for larger portfolios, with costs for due diligence frequently topping several hundred thousand euros. “The whole costs of participating in such auction processes are a write-off for everybody except the final buyer”, said Vogt.
Vogt, who was head of Augsburg-based special fund manager Patrizia Wohninvest until mid-2011, has obviously learned a lot from how Patrizia has expanded out well beyond its traditional strength of residential property trading. He plans to invest a further up to €500m over this year and next, not confined just to the retail sector. “We also see strong investment potential across several asset classes, including student accommodation, corporate real estate or office properties”, he says.
The seven assets sold in to the fund from May Gruppe were all based in northern Germany and are let long-term to Edeka, REWE and COOP. The €25m deal was brokered by the Osnabrück-based JenAcon, headed up by Joachim Arenth, who have become something of a specialist in bundling and selling warehouse retailing portfolios, and this was their second deal for the May Gruppe this year. May Gruppe itself is a developer of local shopping centres and is currently developing assets at eight separate locations across northern Germany, valued at €49m. The total of 30,000 sqm of retail space is due for occupation by retailers such as Edeka, COOP, Aldi and DM from July this year onwards.
