REAL ESTATE -The pan-European retail property investment fund VastNed Offices-Industrial is considering an €50m share offering to finance future acquisitions, it announced.
VastNed intents to place the shares privately with institutional investors. The amount of shares will be no more than 9.9% of the present total capital stock, spokesman Arnaud du Pont said.
Meanwhile, VastNed Retail said it has entered the Turkish market by acquiring a €9.7m shopping centre in Istanbul.
The 4,850m2 retail centre – Elysium Shops – is situated in the wealthy estate Sisly, and comprises of a supermarket as a main attraction, a shopping mall and a fitness club, it said. The centre has 200 parking spaces.
According to VastNed, most of the units have been let to national retail chains, whilst the developer has guaranteed the lease for the empty spaces.
In addition to the over 200 apartments on top of Elysium Shops, the development of several housing projects is being expected in Sisly, VastNed said.
The average rent of the retail units will be €125 per m2 a year. The gross rental income is estimated at approximately €750,000 a year, resulting in net returns of around 7% at the start, the company indicated.
Most of the letting contracts contain a turnover-rent clause, a fixed indexation of 3% and have been established in US dollars, VastNed added. "To limit the currency effect, the acquisition has been financed by a dollar loan."
The retail centre has been sold by Istanbul-based developer Mimtur and the local building company Ofton, VastNed said.
"This acquisition clearly shows in which kind of investments we are interested: retail property with a strong primarily catchment area for a modest price and a potential for rental and value growth," Hans Pars, chief investment offer of VastNed Retail commented.
"Stepped rents and turnover clauses taken into account, we are confident of unleveraged returns of over 10% for the mid-term," spokesman Du Pont said. "We aim at a retail portfolio in Turkey that offer higher returns than similar objects in Western Europe, comprising of 10% of VastNed’s property portfolio for the time being."
In addition, VastNed Offices-Industrial announced the €18.2m acquisition of a 8,500m2 office building in Dusseldorf. The seven-floor building is on the west bank of the Rhine, within the offices estate Seestern, where many multinationals are located.
The fully-let building generates a yearly rental income of €1.2m, from tenants like industrial conglomerate Invensys and insurance group Moneymaxx, VastNed added.
"The net initial return is 6%. Because the net rent of €130 m2 (excluding parking spaces) is below market, we expect an excellent growth potential", it said. VastNed has purchased the office building from Lindner Group and the German property developer LEG.