Klemurs beefs up with 128 Buffalo Grills

Within two weeks of its public listing, real estate company Klemurs has finalised the acquisition of 128 Buffalo Grill restaurants in France. Klemurs said ion a statement on Tuesday that it expects to generate net full-year rents of EUR 18.7 mln for a total investment of EUR 299.8 mln.

Klemurs announced earlier this month that it had a market capitalisation of EUR 165 mln following a successful listing on Euronext Paris on December 6. The company is a subsidiary of Klepierre, the French real estate giant that specialises in shopping centres and offices in continental Europe.

Until now Klemurs had a modest portfolio, consisting of a retail property leased by department store BHV in the 19th arrondissement (district) of Paris, a retail space leased to Truffaut in the 13th arrondissement and a group of stores in the north-western city of Rouen. Klepierre ensured its subsidiary would be more attractive to shareholders by lining it up as its buyer in the Buffalo Grill transaction.

Klemurs purchased 23 of the restaurants outright for a total of EUR 50.8 mln, representing an estimated full-year triple net lease income of EUR 3 mln. The remaining 105 outlets were acquired in the form of finance leases for EUR 249 mln, representing a full-year triple net lease income of EUR 15.7 mln.

Buffalo Grill and Klemurs signed nine-year firm term commercial leases, renewable twice at the request of Buffalo Grill. 'This acquisition constitutes the first step in the strategic partnership agreement between Klemurs and Buffalo Grill, which calls for the involvement of Klemurs in the development of Buffalo Grill's restaurant business in France and in Europe,' Klemurs said.

Klemurs has a firm option on 30 new restaurants in the project or construction phase for an estimated invest and rent of EUR 69 mln and EUR 4.5 mln respectively. In addition, Klemurs has a five-year period during which it can exercise a right of first refusal on all of Buffalo Grill's own developments.