Boetzelen secures EUR 128m financing for retail expansion

German real estate investor Boetzelen said Thursday it had secured financing of EUR 128 mln from German bank Coralcredit. Boetzelen plans to use the funds to expand its retail property portfolio.

The company has built up a portfolio of 103 discounter, supermarket and specialist retail properties for an investment volume of EUR 285 mln. Boetzelen concentrates primarily on properties with established retailers, such as Edeka, Lidl, Rewe and Plus. 'By focusing on this segment, the company is expecting an above-average return on capital employed over the coming years,' Boetzelen said in a statement.

Last June, Boetzelen was one of several European property companies that called off or postponed an IPO or share issue due to unfavourable market conditions. The company had already drastically lowered the price range of its share offering but investors remained reluctant to buy its shares.

There was better news two months ago when the Federal German Tax Office granted pre-REIT status to Boetzelen. This means, applicable retroactively from 26 April 26 this year, anyone selling properties to Boetzelen Real Estate may qualify for so-called exit tax under certain conditions. The regulation specifies that profits from such transactions are exempt from half of corporation tax and trade tax until up to end-2009.

Boetzelen plans to transform itself into the German version of a tax-efficient real estate investment trust (REIT) in January 2008.