UK REIT Hansteen has agreed to sell its entire German and Dutch light industrial-office portfolios to a joint venture of Blackstone funds and M7 Real Estate for €1.3 bn.
The portfolios are being sold to the Onyx venture on a debt-free basis and the price represents a premium of €76 mln (6%) to the year-end 2016 valuation, which itself included a valuation uplift of €34 mln over the 31 December 2015 valuation.
The sale covers 100 assets German assets, valued at €887 mln, and 71 assets in the Netherlands, valued at €308 mln.
Commenting on the transaction, Morgan Jones and Ian Watson, joint CEOs of Hansteen, said: 'This is a compelling opportunity to crystallise both the revaluation gains from these German and Dutch assets achieved by our active asset management and the gains from foreign exchange movements. The value being realised is around 30%, higher than the book value at 31 December 2015 when measured in sterling.
'The sale is in line with our long-term business and portfolio strategy of buying at a low point in the cycle, with low occupancy and rents, adding value through improved asset management and subsequently realising the investment at a higher point in the cycle.'
Buyers
Blackstone is the largest private equity real estate firm in the world with $102 bn (€95 bn) of assets under management. Its global network covers North America, Europe, Asia and Latin America.
M7, a pan-European investor and asset manager for multi-let real estate, will manage the assets being acquired from Hansteen on behalf of the joint venture. Headquartered in the UK, M7 has a total of 130 staff in the UK and 12 Continental European countries. The firm already manages 600 assets with a capital value of more than €2.5 bn.
Well timed deal
Hansteen said the disposal realised the value in the portfolios 'at a time when not only are they at historically high levels of occupancy and rent for the period of Hansteen's ownership but also the euro/sterling exchange rate is favourable'. The REIT plans to return a large portion of the proceeds to its investors.
The transaction, according to Hansteen's board, was highly attractive and well timed for several reasons: The German and Dutch portfolio was at 'historically high levels' of both occupancy and rent during Hansteen's ownership' and there is a high level of investor interest in industrial property investments.
The board added that the deal was expected to be NAV enhancing under IFRS and to show a small enhancement to NAV under EPRA's calculation system.
Completion, subject to shareholder approval and anti-trust clearance in Germany, is expected to occur before the end of June 2017. Hansteen's portfolio will then be predominately focused in the UK, where it has 286 properties, valued at €626 mln. The French portfolio (2 assets) and Belgium portfolio (7) are both valued at €17 mln.
Hansteen was advised by JLL on the transaction.
