Globalworth Real Estate (GWI) has announced that it has entered into a conditional investment agreement to acquire a minimum of 50.01% and up to 67.90% of Warsaw listed Griffin Premium (GPRE). GPRE is a pure-play Polish real estate platform that primarily owns high-quality office and mixed-use assets located in Warsaw and across a number of other key cities (Wroclaw, Lodz, Krakow and Katowice).
GPRE’s portfolio
GPRE’s portfolio comprises six office and three mixed-use (office and retail) properties, which GWI has a gross leasable area of 171k square metres, an aggregate value of €508 million, annualised net operating income of €33.9m, occupancy of 97.6% and a weighted average lease term of 4.5 years (all as at 30 June 2017). It says that the office space is predominantly leased to a diversified mix of blue-chip tenants, including Infosys, Hewlett-Packard, Capita, Phillips and Deutsche Bank, with leading retail tenants including LPP Group and Inditex Group. As at 30 June 2017, GPRE reported unaudited EPRA NAV of €247.2m.
GPRE’s investment pipeline
GWI also reports that GPRE has secured an attractive investment pipeline. These include a forward funding agreement for an office in Wroclaw, currently under development, and a 25% interest in three offices in Warsaw, currently under development, for which the company has an option to acquire the remaining 75% stake upon completion. GWI says that all of these are expected to be delivered over the next two years. GPRe has also announced that it has contracted to acquire a further three ‘high quality office properties’ in Wroclaw, Gdansk and Katowice from Echo Polska Properties for an aggregate purchase price of €160 million. GWI says that these are expected to be acquired before 31 January 2018.
Acquisition through a public tender offer
GWI says that its investment in GPRE will be effected by way of a public tender offer available for subscription by all holders of shares in GPRE which the Company will make, at a price per GPRE share of PLN 5.50, subject to the maximum resultant shareholding by the Company in GPRE being 67.90%. GWI says that the offer price implies an aggregate equity value for GPRE of PLN859m, equivalent to €199.0m, and reflects a premium of 8.5% to the average weighted market price since the first day of listing on the Warsaw Stock Exchange, being 13 April 2017. It also says that, depending on the outcome of the public offer, the total consideration payable by the Company for the Investment will range between PLN429m (€99.5m) at the minimum 50.01% shareholding to a maximum of PLN583m (€135.1m) at the maximum 67.90% level, payable in cash in Polish Zloty. It says that this will be met from the Company’s existing cash resources.
About Globalworth Real Estate
Globalworth Real Estate Investments is a real estate investment company focused on unique property investment opportunities in South Eastern Europe and Central and Eastern Europe, primarily in Romania. Globalworth Real Estate Investments’ focus is on cash flow, principally targeting commercial assets let or to be let to multinational corporates and financial institutions under long term triple-net leases, supported in certain cases by parent company guarantees; and transformation of distressed, underperforming, or mispriced real estate assets into high quality, marketable properties through active asset management.
Globalworth Real Estate expands into Poland with Griffin Premium investment : GWI