W.P. Carey eyes Spain and CEE for new SLB deals

W.P. Carey, the global sale-and-leaseback specialist, is eyeing opportunities in Spain and Eastern Europe as it seeks to invest about EUR 1 bn in Europe this year.

'We certainly have the firepower in terms of equity and cash available although unfortunately we cannot compel owner-occupiers to sell their properties,' Jeffrey Lefleur, recently promoted to managing director Europe for W.P. Carey, told PropertyEU.

W.P. Carey completed more than $340 mln (EUR 235 mln) of property investments globally in the first quarter of 2011. In Europe, the company acquired a portfolio of distribution centres from Dutch supermarket group C1000 for EUR 155 mln; a portfolio of retail facilities in Croatia from Agrokor for EUR 49 mln, and the headquarters of Madrid-based Distribuidora de Television Digital S.A.U. (DTS) for EUR 80 mln.

W.P. Carey raises retail equity in the US via its CPA non-listed REIT vehicles. The success of the programme and the current vehicle, CPA 17, in particular means that W.P. Carey has not moved to fundraising in Europe.

Lefleur said that predicting where the next deals will take place was difficult. Geographical location, he said, is not as important to W.P. Carey as traditional property investors because a sale-and-leaseback depends mainly on a creditworthy corporate seller.

'It is most likely we are going to continue to be in markets that are less attractive to traditional real estate investors, but that said, we have to be transacting with companies that we are confident can weather the storm, have very good market positions and are of a big enough size they can be supported by the banks, the government and the labour unions.'

The state of the capital markets also plays an important role. Lefleur: 'It really might be a question of how the capital markets improve for the rest of the year. I think for the sale-and-leaseback market to operate efficiently it needs liquidity both on the equity side and the debt side. And you also need to have some reasonable yields in regards to cost of capital.'