RDI REIT (RDI) has announced that it has exchanged contracts with Volksbank eG Braunschweig Wolfsburg to sell its Bahnhof Center in Altona, Hamburg for €91.0 million. The sale price reflects a net initial yield of 4.6% and a 9.6% premium to the 28 February 2019 market value. The Disposal is expected to complete on 31 December 2019 and remains subject to certain conditions being satisfied.
About the Bahnhof Altona Center
Bahnhof Altona is a 15,000 sqm retail centre which is integrally linked to the Altona train station and underground transport network. The centre fronts the entrance to the station platforms and comprises 22 stores across three levels and a 49-space multi-storey car park. The centre produces net rental income of approximately €4.5 million per annum (£4.1 million) and is anchored by Media Markt with other key tenants including Lidl, Apcoa, BHG and Rossmann.
RDI says that the property is currently financed through a banking facility totalling €45.0 million at an all-in rate of 2.70% which is anticipated to be repaid on completion. The net proceeds from the transaction, following the repayment of this debt facility, estimated capital gains tax of approximately €5.8 million and certain transaction costs, is anticipated to be approximately €39.0 million (£35.4 million).
Rduction in leverage and retail exposure
RDI says that the net proceeds of the sale will be used to reduce leverage through in its revolving credit facility. The Disposal will also result in a further material reduction in RDI’s retail exposure to approximately 35% of the portfolio, after accounting for the derecognition of the Aviva shopping centre portfolio.
Further updates on RDI’s disposal programme in respect of the German portfolio will be provided with the release of its full year results, scheduled to be published on 24 October 2019.
Comments from Mike Watters, CEO of RDI
“The sale of the Bahnhof Center in Hamburg is in line with our stated strategy to reduce RDI’s retail exposure and focus the portfolio on the UK market. The sale price of €91.0 million reflects a 9.6% premium to the last reported value for the centre and was achieved following a competitive bidding process which drew a number of institutional investors. As previously indicated, the net proceeds from the sale of assets currently being marketed will be deployed to reduce Group debt and strengthen the overall balance sheet at a favourable time in terms of the Euro’s relative strength to Sterling.”
About RDI REIT
RDI REIT is an income focused UK-REIT with a diversified portfolio invested principally in the UK. The portfolio has been repositioned in recent years to increase its weighting to London and the South East and to provide greater exposure to our leading hotel and serviced office operating platforms.
The company aims to deliver attractive income led total returns across the real estate cycle. Its current strategic objectives (a lower leverage capital structure and more focused allocation of capital) are targeted at delivering an industry leading and sustainable income return.
RDI is a UK Real Estate Investment Trust (UK-REIT). Its primary listing is on the London Stock Exchange; it has a secondary listing on the Johannesburg Stock Exchange. The Company is included within the EPRA, GPR, JSE All Property and JSE Tradeable Property indices.
More information on RDI REIT is available at its website: www.rdireit.com