Italian retail property REIT IGD has announced the sale of a portfolio of stand alone hypermarkets and supermarkets in Italy for €140 mln, in line with the assets' book value as at 30 June.
Intermediate Capital Group (ICG), a London-listed global asset management company with assets under management of $65 bn, is buying the package which consists of five hypermarkets in Livorno, Schio, Lugo, Pesaro and Senigallia and one supermarket in Cecina. The portfolio generates €7.7 mln of net rental income per year under long-term leases.
Under the agreement, the properties will be transferred to a closed end real estate investment fund (an Italian REIF) invested by ICG and IGD and managed by Savills Investment Management SGR. ICG will hold a 60% share of the fund while IGD will take the remaining 40%. The fund aims to further enhance the portfolio over the next few years and sell it on the market at the best conditions possible.
Net of the amount reinvested in the fund, IGD will receive roughly €112 mln for the sale at the time of the closing which is expected to take place in the fourth quarter of 2021. The transaction is subject to receiving a loan for at least 50% of the assets’ value.
The transaction is in line with IGD’s strategy to focus on the full ownership of shopping centers (mall + hypermarket), which allows for greater flexibility and speed when responding to market changes and tenants’ needs. It also allows the group to reduce its financial leverage which stood at 46.7% as at 30 June 2021.
'We are very satisfied with this transaction which testifies to the quality of our assets, sold at last June’s appraised value,' said Claudio Albertini, the IGD’s Chief Executive Officer. 'As already stated in the past, the gains from the sale will allow us to reduce our Loan-to Value markedly and obtain the financial resources needed to cover maturities for all of 2022; assuming that there will be no new restrictions due to a worsening of the public health situation and taking into account the good operating results, as well as the prospects for the next few months, we believe that the conditions to begin paying a dividend to our shareholders again in 2022 exist, just as we had hoped.'
Chad Brown, investment director of Sale & Leaseback at ICG added, 'This is an attractive deal for ICG, supported by strong trading performance and underlying sector fundamentals. Grocery real estate investments are a key target for the Sale & Leaseback fund as we continue to actively seek opportunities across Europe. We look forward to working with IGD and the Tenant of the properties.'
