Unibail-Rodamco sells 46% of German developer to Canada's CPPIB

Unibail-Rodamco is selling a 46% indirect stake in German shopping centre developer-manager Mfi to Canadian pension investor CPPIB.

The price of €394 mln reflects an implied net initial yield of 5.1% for Mfi's portfolio and an average price of €5,000 per m².

Unibail-Rodamco, Europe's largest listed property company, announced the transaction late on 15 May. Under the agreement CPPIB will also provide additional funding to support Mfi's financing strategies, lifting the Canadian investment to a total of €740 mln.

In June 2012, Unibail-Rodamco acquired a 51% stake in a company which, at the time, owned 90.4% of Mfi, from Perella Weinberg Real Estate Fund I.

In February last year, Unibail-Rodamco entered into a partnership with CPPIB on Centro, one of Germany's largest shopping centres, located in Oberhausen. Following transactions on 2 July 2014 and 30 April 2015, Unibail-Rodamco's stake in Mfi increased to 94.15%.

Christophe Cuvillier, CEO of Unibail-Rodamco, said: 'We are delighted to further extend the partnership between Unibail-Rodamco and CPPIB in Germany which started in 2014 when Unibail-Rodamco acquired a stake in Centro. This decision aligns the interests of Unibail-Rodamco and CPPIB and allows the Centro team to contribute meaningfully to the further growth of Mfi. Unibail-Rodamco and CPPIB are committed to grow the German business and source new opportunities together.'

Andrea Orlandi, head of real estate investments in Europe at CPPIB, added: 'This agreement allows CPPIB to build on our existing relationship with Unibail-Rodamco, Europe's premier shopping centre operator, through this new joint-venture in Germany. As a long-term investor, this transaction provides us with the unique opportunity to achieve immediate scale in the retail sector in Europe's largest economy.'

The transaction is subject to regulatory approval and is expected to close in the third quarter of 2015.