Coima Res, the Italian real estate investment trust launched earlier this year, is looking at roughly €1 bn of acquisition opportunities after growing its portfolio more than three-fold in the last two months.
‘Our acquisition pipeline is significantly higher than what we had anticipated, as we are analysing €1 bn of potential acquisitions to carry out before year-end. All these assets are in Milan and are very well located, with a weighted average lease term between 5 and 9 years and an Epra net initial yield above 5%,’ commented CEO Manfredi Catella during a conference call to present the results for the first half of the year. ‘Our objective is to build a focused portfolio of assets, with a diversified tenant base, and good risk adjusted returns.’
Asked how the company would finance these acquisitions, Catella said he expects to execute only a portion of the deal pipeline. ‘We are aware of the discount we are trading at and in any case we will not issue equity at a discount to finance acquisitions.’ Coima Res is currently trading at a roughly 25% discount to net asset value.
The company is looking to sell around 15% of non strategic assets part of the €145 mln worth of Deutsche Bank units it acquired earlier this year from the Qatari sovereign wealth fund in exchange for company shares. Another 15% will be sold after carrying out value-enhancement initiatives on the assets, Catella added.
Catella: ‘We see a window of opportunity in Italy in the next few months, because the market is polarised with on the one hand very conservative buyers looking for superprime locations and on the other side the private equity investors looking for opportunities. There is not much competition in the mid of the investment spectrum and we expect a generous supply of real estate coming from the public and the banking sectors.’
The company, Italy’s third real estate investment trust since the introduction of the tax-efficient regime in 2007, raised gross proceeds of €215 mln in an initial public offering in May. It subsequently increased its portfolio more than three-fold from €145 mln at the time of listing to some €500 mln at present. Coima Res bought the Vodafone complex offering 45,000 m2 of space for an all-in cost of €204.3 mln, or a yield of 6.2%, the Gioiaotto scheme in Milan for €65 mln and Palazzo Sturzo in Rome for a further €80 mln.
The company posted a profit of €2.7 mln for the first six months of the year with revenues coming in at €4.5 mln. EPRA NAV per share amounted to €9.8 at end-June 2016. Coima Res said it expects a positive result in the second semester which will contribute to make 2016 a profitable year.
