Patrizia Immobilien has acquired a €100m retail property portfolio in Germany from Marathon Asset Management.
The 27 assets were purchases on behalf of Patrizia Retail Opportunity SCS, a core-plus fund launched in 2016.
The portfolio, which comprises around 55,600sqm of total lettable space is made up of retail parks and grocery stores, 98% of which are anchored by food tenants.
Germany’s four largest food retailers – Rewe Group, Edeka-Verbund, Schwarz-Gruppe and Aldi – provide three quarters of the rental income.
Occupancy is at 99%, with a weighted average lease term of 9.2 years.
As a result of the acquisition, Patrizia manages more than €8.3bn of European retail assets and €5.1bn of German retail assets.
Daniel Herrmann, head of fund management retail at Patrizia, said: “The acquisition of this portfolio, with its potential for sustained income growth, will significantly optimise the risk-return profile of the fund.”
He added: “At the same time, we are acquiring modern, well located properties with excellent tenants from the food retail sector and which occupy a dominant position in their respective catchment areas.”
The announcement coincided with the release of a report by CBRE that showed that transaction volumes in German retail property have stablised after falling last year.
The first quarter of 2019 saw €2bn channeled into the sector, while prime yields of retail parks dropped by 0.35 percentage points to 4.15% when compared to Q1 last year.
“The stabilisation of the transaction volume shows that many investors still consider retail property to be an attractive asset class,” said Jan Dirk Poppinga, co-head of retail investment at CBRE Germany.
“As in recent quarters, retail warehouses and retail parks are high on investors’ shopping list.”
Retail parks and warehouses took the largest share (37%) of transactions, followed closely by shopping centres at 35%.