The Disposal, which is in line with RDI’s strategic decision to exit its German retail portfolio, reflects a net initial yield of 6.6% assuming full purchaser’s costs and a 16% discount to the 29 February 2020 market value.
The Disposal includes the transfer of the associated €62.0 million bank facility with a maturity date of 31 March 2021. The Schloss-Strassen Center is a 18,600 sqm retail centre located on the main retail pitch in the Steglitz-Zehlendorf area in South West Berlin and is integrally linked to the underground transport network.
The centre produces net rental income of approximately €4.7 million p.a. (£4.2 million p.a.) and is anchored by Primark and Rewe, with other key tenants including Contipark, Smyths Toys and Fitness First. The transaction reduces the Group’s overall retail exposure to 24.1% on a pro-forma basis (29 February 2020: 28.4%) and removes a near term refinancing requirement which would have required the contribution of additional equity into a sector that the Company is seeking to reduce its exposure to.
Mike Watters, CEO at RDI, commented: “The sale of the Schloss-Strassen Center in Berlin is in line with our stated strategy to reduce RDI’s retail exposure and focus the portfolio on core assets in the UK market whilst strengthening the balance sheet. We are pleased to have successfully concluded this disposal, particularly against a highly challenging macro-economic backdrop, and to have made further progress on our withdrawal from the German market where we now have only €50.5 million of assets still subject to disposal, all of which are at various stages of negotiation.”