WP Carey has completed the sale of a 100,000 m2 portfolio of German DIY stores for approximately €160 mln, reflecting a 6.75% yield.
Hamburg-based asset manager Captiva Capital Partners fought off 12 other bidders to buy ‘Project Steel’, which comprises eight stores let on 20-year leases to Hellweg.
The bidders were mainly from Germany, but also included Middle Eastern investors, attracted by the long income. There is about 18 years’ income remaining after WP Carey agreed new leases with the retailer in 2017.
The Project Steel stores were carved out of a larger portfolio which the US sale-and-leaseback company amassed more than a decade ago for a total of €505 mln.
While Hellweg is not one of the market-leading DIY covenants in Germany, it is thought the bidders felt the value was underpinned by possibilities for potential future alternative uses.
WP Carey originally offered 10 or 11 assets in the package, which was whittled down to eight due to the corporate structure.
The stores, mostly located in greater Berlin and North RhineWestphalia, will be held in Captiva’s DIY Value 1 spezialfond and were acquired with around €110 mln of equity and €50 mln of debt.
JLL advised WP Carey.
This article previously appeared in PropertyEU's sister publication, EuroProperty
