TLG Immobilien, a listed commercial property investor 40% owned by US private equity firm Lone Star, has purchased the Burgwall shopping centre in Wismar on the Baltic Sea from a fund managed by TH Real Estate.
TLG Immobilien, a listed commercial property investor 40% owned by US private equity firm Lone Star, has purchased the Burgwall shopping centre in Wismar on the Baltic Sea from a fund managed by TH Real Estate.
The transaction price amounts to just under €19 mln.
Completed in 1993, the shopping centre offers 11,700 m2 of lettable space, 98% of which is let, and generates an annual rental income of €1.5 mln. The remaining weighted average lease term (WALT) is 5.4 years, and the complex also offers 224 parking spaces.
Following this transaction, TLG has added €190 mln of assets to its portfolio this year, including two office properties in Dresden and Rostock and four specialist stores and retail food centres in Berlin and the surrounding areas as well as in Rostock.
The company plans to grow its portfolio to around €2 bn in the next three years, according to management board member Peter Finkbeiner.
‘Following the acquisition by Lone Star, we cleaned up the company’s portfolio and adjusted our corporate structure. We then began to grow and last year started buying assets again. We are looking to buy for €500 mln in the next three years,' Finkbeiner said.
The company will focus on assets which are FFO accretive, he added. 'For offices we are actively looking in Berlin, Dresden, Leipzig and Rostock and for the retail assets we will invest in highly frequented micro locations across eastern Germany, which offer higher yields compared to the western part.'
Commenting on financing for the acquisitions, Finkbeiner said the company still has ‘some cash’ available from the IPO and will supplement this with new debt, targeting a long-term net LTV ratio of between 45 and 50%.
TLG Immobilien went public in October last year, raising €360 mln in the offering. In total, it placed 33.5 million shares with institutional investors at a price of €10.75 per share, representing the bottom end of the expected price range. US private equity group Lone Star retained a 40% stake in the company, which it acquired from the German state in 2012.