Part of the portfolio, Freesen Center in Neumünster, Germany. Credit: Patrizia AG

Patrizia divests portfolio of 12 German retail parks

On September 9, 2021, Patrizia AG has disposed of a portfolio of retail parks located across Western Germany. The portfolio, comprised of 12 established retail assets totaling around 180,000 sq m, has been sold on behalf of clients to MEAG, the asset manager for Munich Re and Ergo.

The portfolio was assembled by Patrizia between 2005 and 2012 as part of the company’s ongoing strategy to invest in food-anchored retail in attractive catchment areas across Europe. Following the implementation of an active asset management strategy, regular investment ensured these assets are fit for purpose in a dynamic retail market. Patrizia has increased the occupancy rate to 97% during holding period with a WALT of 10 years.

Strong tenant covenants anchor the portfolio which has a 45% food retail component and contribute around two thirds of the total rental income, including supermarket chains Kaufland and Edeka, Germany’s largest supermarket group. The properties span seven of Germany’s Western states and an average catchment of over 220,000 residents and have a high average centrality index.

Martin Trodden, Fund Management at Patrizia, commented: “Having enhanced the income profile of these assets over many years, this sale presented us with an opportunity to crystalize our investment and deliver strong returns to our clients. German retail, especially food anchored, has been an attractive sector to invest in, due largely to its ability to deliver sustainable income, while our program of active asset management of this portfolio has further bolstered returns.”

And further indicates, “Retail parks, and particularly those that are food-anchored, have proven resilient to the pandemic. We still see the potential for sizeable value growth in selective physical retail assets, and we continue to search for new opportunities to build our European retail portfolio.”

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