Union snaps up Sophienhof mall in Kiel for 6.5%

Union Investment Real Estate has bought the Sophienhof shopping centre in Kiel, Northern Germany, from Aberdeen Asset Management's frozen Degi Europa open-ended fund.

Although the financial details were not disclosed, Aberdeen said the asset was sold for a price slightly above its appraised value, which was set at nearly EUR 151 mln at end-March 2011. The deal is understood to reflect a yield of 6.5%.

The scheme, which has been nearly fully let since 1988, is earmarked for Union's UniImmo Germany fund.

Later this year, Sophienhof is scheduled to undergo an expansion and redevelopment programme to add some 2,300 m² of space, bringing the total lettable area to nearly 44,000 m². The centre also offers 988 parking spaces. Hamburg-based developer and property manager ECE has a long-term management contract on the asset and will be responsible for the centre's revamp. In 2011, the mall provided EUR 9.8 mln of annual rental income.

Aberdeen said on Monday that the disposal reduces Degi Europa's loan to value ratio to 26.9%, from 31.5% previously, while lowering the fund's liquidity ratio to 13% from 18%. Sophienhof was securitised against a loan with a leverage of 66%, according to the company's half-year results to end-March 2011.

JLL and law firm GSK advised Aberdeen. CBRE and Clifford Chance acted for Union Investment.