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RDI REIT offloads German shopping centre for EUR 91m

By Josh White

Date: Wednesday 18 Sep 2019

RDI REIT offloads German shopping centre for EUR 91m

(Sharecast News) - RDI REIT has exchanged contracts with Volksbank eG Braunschweig Wolfsburg to sell its Bahnhof Center in Altona, Hamburg for €91m (£80.67m), it announced on Wednesday.
The London-listed firm said the disposal, which was in line with its strategic decision to exit its German retail portfolio, reflected a net initial yield of 4.6%, and was a 9.6% premium to the 28 February market value.

It said the disposal was expected to complete on 31 December, and remained subject to certain conditions being satisfied.

Bahnhof Altona is a 15,000 square metre retail centre, integrally linked to the Altona railway station and underground transport network, RDI explained.

The centre fronts the entrance to the station platforms and comprises 22 stores across three levels, as well as a 496 space multi-storey car park.

RDI said the centre produced net rental income of around €4.5m per annum, and was anchored by electronics retailer Media Markt with other key tenants including Lidl, Apcoa, BHG and Rossmann.

The property was currently financed through a banking facility totalling €45m at an all-in rate of 2.70%, which was anticipated to be repaid on completion.

RDI said the net proceeds from the transaction, following the repayment of the debt facility, estimated capital gains tax of approximately €5.8m and certain transaction costs, was expected to be approximately €39m.

In line with RDI's strategic objectives, the board said the net proceeds would be used to "efficiently reduce" leverage through a reduction of the group's revolving credit facility, that would create enhanced headroom and liquidity.

The disposal would also result in a further material reduction in the company's retail exposure to approximately 35% of the portfolio, after accounting for the derecognition of the Aviva shopping centre portfolio.

Further updates on the disposal programme in respect of the German portfolio would be provided with the release of the firm's full year results, scheduled to be published on 24 October, the board added.

"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," said RDI REIT chief executive officer Mike Watters.

"The sale price of €91m 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."

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