Credit: Patrizia AG

PATRIZIA delivers strong returns for investors through selling big German retail portfolio

PATRIZIA AG has sold a retail portfolio comprising 50 stores across Germany on behalf of its clients.

The portfolio has been sold to GPEP, a German based investment manager focused on food retail.

The portfolio has a GLA of 144,000 sq m and comprises 50 grocery stores let to strong covenants across Germany. Eight of Germany’s ten largest grocers by market share are represented in the portfolio.  The stores are located in 11 different German states, mostly in small to middle sized towns in West Germany. Edeka, Germany’s largest grocery store chain, operates 23 stores within the portfolio, accounting for around 52% of the rental income. The other tenants include REWE, Lidl and Aldi.

The portfolio was acquired by Patrizia in 2015 as part of the Company’s ongoing strategy of investing in food-anchored retail. Since then, Patrizia has engaged in extensive asset management activities, notably optimising the portfolio through the extension of lease agreements and value accretive capex measures. As a result, the portfolio now generates over EUR 15 million per year in rental income, has a 98% occupancy rate and a WALT of over 8 years.

Daniel Herrmann, Head of Fund Management Retail at Patrizia, commented: “Our asset management plan was successfully executed and the fund reached the end of its lifetime. So this is the perfect time for us to crystalise the value we have generated for our clients since the acquisition of the assets in 2015. Not only have our assets delivered strong and stable returns for our clients, but we now have extra firepower to invest in new accretive opportunities.”

“The food retail sector in Germany generates solid and sustainable revenues. There is strong competition between the main food retailers for good locations, solid food sales growth figures and all of this allows us to sign long term leases. Core investors continue to have a strong appetite for food-anchored retail as it continues to offer an attractive risk / reward ratio. That’s why we will continue to source these opportunities for our clients and add them to our existing portfolios whenever we find them.”

Patrizia manages more than EUR 6.5 billion in the retail sector throughout Europe with EUR 3.5 billion invested in the German food retail sector.

Patrizia was advised by K&L Gates, CBRE and EY.

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