Schroder Real Estate KVG has acquired a DIY centre in Brunswick, Germany, from M7 Real Estate (M7) in a share deal worth €30 mln.
The property, constructed in 2004, provides 18,000 m2 of total lettable area and over 500 parking spaces. The property is let to German DIY chain Hornbach on a 14-year lease.
'We are confident in the prospects for DIY centres as an asset class,' commented Nils Heetmeyer, investment director of Schroder Real Estate KVG. 'In our view, the risk of DIY centres being displaced by online trading is much lower than for other retail sectors. Retailers such as Hornbach are succeeding in deftly combining bricks-and-mortar retailing with online trading. This results in an attractive risk/return profile from the investors' viewpoint.'
M7 became asset manager of the property when it acquired the DIY centre in 2015 on behalf of the M7 European Real Estate Investment Partners (M7 EREIP I) fund.
Alyssa Huse, managing director of M7 in Germany, said: 'During our two-year ownership of the largest Hornbach DIY centre in northern Germany, we have succeeded in negotiating an early 12-year lease extension with Hornbach and thereby generating an attractive investment product.'
