Babcock & Brown sells EUR 110m German retail portfolio

Investment and asset management group Babcock & Brown has signed a contract to sell its portfolio of German retail property. According to the company statement, the fund has sold the portfolio 'with an enterprise value of approximately EUR 110 mln' to a company listed on London's junior AIM market. Following the sale, Babcock & Brown will have sold approximately 70% of the European retail portfolio on its balance sheet at the beginning of 2007.

Babcock & Brown Global Head of Real Estate, Eric Lucas, said the retail portfolio divestments since 30 June 2007 in total represent EUR 395 mln of the EUR 750 mln real estate earmarked for disposal in the company’s interim result release in August 2007.

'The profit on these sales, the majority of which will be reflected in our 2008 results, has been in line with our original targets for these assets, when acquired, and illustrate the ongoing investor demand in Europe for well-priced, quality assets with stable rental income from high creditworthy tenants,' Lucas explained.

'The sale process for the remaining portfolios on our balance sheet is proceeding well and is expected to be completed in the first half of 2008. In addition, the sale of a number of the European retail assets jointly owned with GPT is proceeding well and is also expected to be completed in the first half of 2008.'

Additionally, Babcock & Brown are expected to reach final close on the sale of a 94% interest in a EUR 50 mln German residential development portfolio in February. The sale includes a long term asset management agreement.

'These sales and a number of other smaller disposals leave the Babcock & Brown balance sheet well positioned to take advantage of opportunities in the market, especially those that arise as a result of the current dislocation in capital markets,' Lucas said.