The Vita-Center is an important local supply and district center in the Chemnitz district Morgenleite with a catchment area of about 20,000 inhabitants in the immediate vicinity. The property, which was built in 1999, was revitalised in 2018 and covers a rental area totalling around 42,000 sq m.
Around 70% of the annual rent comes from retail space, which is largely anchored by non-cyclical tenants such as grocery retailers REWE and ALDI, drugstore retailer dm as well as healthcare and home appliance and other suppliers. In addition, around 10% of the annual rent is accounted for by office space as well as an indoor trampoline and climbing park, which represents a supraregionally well-known leisure offer. Furthermore, the Vita-Center houses a district library of the city of Chemnitz.
The property generates an annual rent of more than EUR 2.9 million and has an average residual lease term (WALT) of more than seven years, with the major anchor tenants having significantly longer lease terms. In addition, according to DKR, the current vacancy rate of 21% offers significant value creation potential, which is to be realised step by step. The transfer of benefits and encumbrances is expected in August/September 2019. The acquisition of the Vita-Center is DKR’s largest single transaction so far.
Before that, DKR had already acquired four food discounters in Eggesin and Lübz (both Mecklenburg West-Pomerania) as well as in Döberitz and Fürstenwalde (both Brandenburg) with certifications in April and May. Anchor tenants include Netto, Lidl, Norma as well as KiK and TEDi. The total investment volume of these properties amounts to EUR 40.6 million with an annual rent of approximately EUR 3.4 million.
Thus, the property portfolio of Deutsche Konsum in the financial year 2018/2019 has already grown by 34 properties with a purchase volume of around EUR 158 million. Thus, the overall portfolio (pro forma) currently comprises 123 properties with a total rental space of more than 720,000 m² and a book value of around EUR 580 million (before the next real estate valuation as of 30 June 2019) and an annual rent of around EUR 49 million. In addition, DKR is in concrete purchasing processes and expects further acquisitions shortly.
Rolf Elgeti, CEO of Deutsche Konsum REIT-AG: “With the acquisition of the Vita-Center in Chemnitz, we acquired a very established and strong retail property in the micro-location, which has convinced us in terms of location, tenant mix and the overall concept after the revitalisation. In addition, we were able to acquire the property at a very attractive rate of return, which is slightly lower than the general return requirements of DKR, but absolutely reasonable with respect to the quality, stability and further potential of the property.”