Puma Brandenburg, a Guernsey registered closed-ended investment company that invests in German real estate, has reached a legally binding agreement to buy 45 edge-of-town retail properties for just over EUR 108 mln, excluding acquisition costs. The properties comprise almost 55,000 m[sup]2[/sup] of lettable retail area and are leased to German discount supermarket chain Lidl on contracts with an average duration of 11.2 years.
Puma Brandenburg, a Guernsey registered closed-ended investment company that invests in German real estate, has reached a legally binding agreement to buy 45 edge-of-town retail properties for just over EUR 108 mln, excluding acquisition costs. The properties comprise almost 55,000 m2 of lettable retail area and are leased to German discount supermarket chain Lidl on contracts with an average duration of 11.2 years.
AIM-listed Puma said the acquisition cost per square metre is just under EUR 2,000 and the company's aggregate equity commitment is almost EUR 30 mln. It is also taking over EUR 79.5 mln of bank financing 'on pre-credit crisis terms'. The company expects the deal will generate a 10% post-leverage cash-on-cash yield from the first day. Puma added that there was a potential to add up to 5-6% of additional income through expansion of the properties and third-party revenues.
Chairman Peter Freeman said: 'The edge-of-town food discount segment is expected to have the strongest growth prospects of all retail trading formats. The tenant, Lidl, is a market-leader in its area, and part of the Schwarz group with sales of $45 bn per annum. In addition, the portfolio itself offers further development potential through expansion of floor space or co-location of complementary businesses.'
Prior to this transaction, Puma had acquired over EUR 588 mln of assets with a yield of 6.58%.
