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.