CBRE poised to market €150m Italian supermarket portfolio

Italy’s largest supermarket chain Coop has hired agent CBRE to market a portfolio of neighbourhood supermarkets in Northern Italy, PropertyEU has learned.

The sale – to be officially launched at the end of the month – is believed to be the first and only new product offered to market in the country since the onset of the coronavirus crisis in the country in early March. CBRE is targeting offers at above €150 mln for the package which consists of over 20 schemes largely focused on Northern Italy. The portfolio would be sold under a sale-and-leaseback structure.  

‘This type of assets are crisis-resilient and should give security while remaining appealing for institutional investors,’ commented Silvia Gandellini, head of retail investment properties, Italy at CBRE.

Retail transactions in Italy and across Europe have come to a virtual standstill in the recent past with several sales put on hold as investors grapple with uncertainty linked to the coronavirus pandemic.

PropertyEU understands that asset manager Kryalos Sgr, acting on behalf of London-based alternative asset management firm Hayfin, has just snapped up a portfolio of five Carrefour cash and carry supermarkets in the Piedmont and Liguria regions for a price of €45 mln. The assets were sold by US private equity fund Apollo in one of only a few retail transactions closed over the past eight weeks.

‘We’ve been focused on closing those deals that were either exchanged prior or were about to exchange. And I can tell you the results have been mixed: there’s some good news and some bad,’ says one agent bluntly when asked for his (unattributable) views on the effect of coronavirus lockdown on European capital markets.

There are deals that had been in place for weeks or months that have stumbled right at the finish line. Hammerson’s £400 mln sale of seven UK retail parks to Orion in the UK has collapsed after the UK private equity firm confirmed last week that it would not complete on the deal.

According to those who track the market, Hammerson had four other bids on the assets including a broad mix of bidders with offers ranging from £310 to £345 mln – considerably below Orion’s.

‘There was a good depth of well capitalised bidders, which does suggest that this portfolio will trade, however given other moving parts (Covid) and previous pricing by underbidders, this is likely to be considerably below the Orion price, notwithstanding the holding of the deposit,’ commented Colm Lauder, real estate analyst at Goodbody.

Manchester Airport Group’s £510 mln sale of 69 UK properties and sites to Columbia Threadneedle - agreed last year and also exchanged – is also said to be in jeopardy, although negotiations continue. According to reports, the buyer has invoked a Material Adverse Conditions (MAC) clause, a term that is popping up around Europe.

The current crisis is all the more harmful to retail as the current living conditions exacerbate the ongoing digitalization of the world’s economies, accelerating the growth of e-commerce. ‘Most retail transactions are on hold, as investors assess the impact of this crisis both at an asset and country level,’ said another broker active in cross border investment, ‘this is in stark contract to the end of 2019 and the first months of this year, where prime retail assets were trading across Europe’.
 

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