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Background and Opportunity
- Acquisition for an 8.3% yield of an under-managed city block comprising 134,600 m2 and 1,600 car parking spaces comprising the bulk of Magdeburg’s CBD
- Asset was one of the final assets in a German closed ended fund in liquidation mode
- Business plan to unlock rent reversions through regears and re-lettings and the re-positioning of the retail mall
Transaction Progress
- The JV regeared or re-let over 60% of the office and retail space increasing the WALT and the rent by over 25% during the holding period
- Retail mall refurbished and re-positioned via capex programme with lease extended for main anchor supermarket tenant
- Accretive senior financing facilitated a cash on cash return of over 20% p.a.
Current Status
- Property sold in December 2020 to a German institutional investor
- The JV generated a post tax profit of over 30% IRR / 2.5x on equity
