Schroder European Real Estate buys retail property in Frankfurt

The Board of Schroder European Real Estate Investment Trust has announced the company’s fifth investment since listing on 9 December 2015. Contracts have been signed for the purchase of a convenience retail property located in Germany. The asset is a grocery supermarket anchored, multi-let convenience retail centre located in a growing inner urban region of Frankfurt am Main. The asset was built in 2004 and modernised in 2015 and comprises 4,525 sqm of lettable area. The investment is anchored by a 1,600 sqm Lidl supermarket with an initial lease term exceeding 10 years. The combined weighted average unexpired lease term of all leases is approximately 8 years. The investment was acquired for €11.05 million, reflecting a net initial yield of 5.6%. The acquisition is fully in line with the strategy of investing in defensive, income producing assets in major cities with the potential for long term growth.

This investment takes the company’s committed capital deployment to approximately  €110 million at a blended net initial yield of approximately 5.9%.

Tony Smedley, Head of Continental European Investment at Schroder REIM commented: “Convenience retail in growth cities is a key target of the Company given its relative resilience in a rapidly changing retail environment. Lidl is the key anchor tenant on this scheme and we have plans to change tenant mix over time to further improve footfall“.

The purchase is subject to the standard land registry notification and is therefore expected to complete during June 2016.

SERE : Schroder European Real Estate buys retail property in Frankfurt