File picture: James White
CAPE TOWN –  RDI Reit had exchanged contracts with Volksbank eG Braunschweig Wolfsburg to sell its Bahnhof Center in Altona, Hamburg for €91.0 million (R1.47 billion), a statement said.

The share price increased 5.37 percent to R21.60 on Wednesday morning. 

The disposal, in line with RDI’s strategy to exit its German retail portfolio, reflected a net initial yield of 4.6 percent and a 9.6 percent premium to the February 28, 2019 market value. The transaction was expected to complete on December 31, 2019. 

Bahnhof Altona is a 15 000 square metre retail centre linked to the Altona train station and underground transport network. It comprises 22 stores across three levels and a 496 space multi-storey car park. 

The centre produces net rental income of about €4.5 million (R72.8 million) per year, The property is financed through a banking facility totalling €45 million at a rate of 2.7 percent, which was anticipated to be repaid on completion. 

The net proceeds, after this repayment, was anticipated to be about €39 million (R630 million). 

This would be used to reduce leverage by reducing the group’s revolving credit facility to create headroom and liquidity. The disposal would also result in a material reduction in RDI’s retail exposure. 

RDI CEO Mike Watters said the sale followed a competitive bidding process, which drew a number of institutional investors. 

BUSINESS REPORT