UK REIT RDI has exchanged contracts with German bank Volksbank eG Braunschweig Wolfsburg to sell the Bahnhof Center in Altona, Hamburg for €91.0 mln.
The disposal, which is in line with RDI’s strategic decision to exit its German retail portfolio, reflects a net initial yield of 4.6% and a 9.6% premium to the 28 February 2019 market value. It is expected to complete on 31 December 2019.
Bahnhof Altona is a 15,000 m2 retail centre which is integrally linked to the Altona train station and underground transport network. The centre fronts the entrance to the station platforms and comprises 22 stores across three levels and a 496 space multi-storey car park. The centre produces net rental income of €4.5 mln per annum and is anchored by Media Markt with other key tenants including Lidl, Apcoa, BHG and Rossmann.
The property is currently financed through a banking facility totalling €45.0 mln at an all-in rate of 2.70% which is anticipated to be repaid on completion. The net proceeds from the transaction, following the repayment of this debt facility, estimated capital gains tax of €5.8 mln and certain transaction costs, is anticipated to be €39.0 mln, RDI said in a statement.
RDI plans to use the net proceeds to reduce leverage through a reduction of the Group’s revolving credit facility. The disposal will also result in a further material reduction in RDI’s retail exposure to approximately 35% of the portfolio after accounting for the derecognition of the Aviva shopping centre portfolio.
Mike Watters, CEO of RDI, commented: 'The sale of the Bahnhof Center in Hamburg is in line with our stated strategy to reduce RDI’s retail exposure and focus the portfolio on the UK market.'