Redefine to take control of German venture for €49m
RDI Reit
121.20p
16:40 30/04/21
Property investment trust Redefine said it had reached a conditional agreement to take control of the German Leopard Portfolio joint venture, in which it holds an existing 50%, for €49m.
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After the deal Redefine will hold an effective 94% controlling interest in the portfolio, while providing 100% of its non-bank financing requirements by way of shareholder loans.
The Leopard Portfolio is made up of 66 German retail properties generating gross rental income of €13.9m, of which 99.2% is indexed to between 60% - 70% of German CPI subject to indexation reaching a cumulative hurdle of 10%.
Redefine said the portfolio is independently valued at €175.5m reflecting a net initial yield of 7.4%.
The purchase price reflects taking on €86.1m in existing debt facilities. The facilities have an average all-in cost of 1.4% a year which supports a 10% geared income return on the total amount payable by Redefine, including transaction costs.
On a proportionate basis, the deal will contribute an extra £5.4m in gross rental income to the group and about £4.6m in net rental income after all landlord costs. A £4.2m increase in underlying earnings, which excludes the impact on earnings of unrealised gains and losses, results in a cash on cash yield of approximately 10% on the amount payable by Redefine including transaction costs.