Benson Elliot has expanded its German convenience retail strategy with the acquisition of a €65.5m grocery-anchored retail asset.
The UK-based private equity real estate fund manager has bought the 18,600sqm Schloss-Strassen Center in the south-west of Berlin from RDI REIT.
UK real estate investment trust RDI said the disposal, which is in line with its strategic decision to exit its German retail portfolio, reflects a net initial yield of 6.6% assuming full purchaser’s costs and a 16% discount to the 29 February 2020 market value. The disposal includes the transfer of the associated €62m bank facility, it said.
RDI acquired the asset for €93m in 2013.
Benson Elliot said it intends to reposition the centre by consolidating its grocery and convenience offering, reconfiguring space and re-gearing lease terms.
Modulus Real Estate, a Hamburg investor and asset manager, has taken a minority stake in the transaction. Modulus will implement day-to-day project and asset management at the property, Benson Elliot said.
The acquisition takes Benson Elliot’s German convenience retail holdings to €250m.
Joseph De Leo, senior partner at Benson Elliot, said: “We continue to see long term value in market-dominant, needs-driven retail formats.
”While the structural trends underpinning the retail sector have no doubt accelerated over the past few months as a result of the enforced lockdown, the benefits of grocery-anchored centres, which remained open because of the community services they provide, were also accentuated.”
Mike Watters, CEO at RDI, said: “The sale of the Schloss-Strassen Center in Berlin is in line with our stated strategy to reduce RDI’s retail exposure and focus the portfolio on core assets in the UK market whilst strengthening the balance sheet.
“We are pleased to have successfully concluded this disposal, particularly against a highly challenging macro-economic backdrop, and to have made further progress on our withdrawal from the German market where we now have only €50.5m of assets still subject to disposal, all of which are at various stages of negotiation.”
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