Stenprop sells of Neucölln Carrée retail park in Berlin for EUR27m
Stenprop, a UK multi-let industrial (MLI) property company, has exchanged contracts on the sale of its long leasehold interest in the Neucölln Carrée retail park in Berlin, Germany to Hamburg-based real estate investment manager Union Investment, acting on behalf of one of its institutional property funds for EUR27.0 million.
The disposal price reflects a EUR3.6 million premium to the 31 March 2020 book value.
Providing 13,364 sq m of gross lettable space the 14-unit retail park is anchored by an Edeka supermarket and provides a range of other convenience-led retail. The weighted average rental is currently circa EUR107 per s qm.
The disposal is in line with Stenprop’s strategy to become a 100 per cent UK MLI business via the sale of all non-core properties in its portfolio and the reinvestment of the proceeds into UK MLI properties. As at 31 March 2020, approximately 58 per cent of Stenprop’s portfolio was made up of UK MLI estates. On completion of the disposal, assuming no further purchases of MLI estates, the MLI percentage of the portfolio will rise to 60 per cent, based on Stenprop’s total property asset valuations as at 31 March 2020.
Net proceeds from the sale after deduction of anticipated transaction costs, repayment of debt and property taxes is expected to be EUR15.5 million. Stenprop intends to use the net proceeds from the disposal to fund further acquisitions in the MLI sector.
Completion of the disposal is expected to occur at satisfaction of the last conditions precedent described below and by no later than 15 January 2021, following which the disposal price will be paid to the seller. Failure to complete due to a default by the purchaser will result in the seller retaining the deposit amount of EUR2.7 million which was paid by the purchaser into an escrow account on 15 July 2020. Either party may terminate the disposal agreement should the property suffer significant structural damage resulting in rent losses exceeding 40 per cent over a period of six months or should certain major tenants become insolvent prior to completion. The seller believes the chances of these events occurring to be remote given the trading history of these tenants.
The disposal agreement contains market standard representations and warranties for a deal of this size and nature. A limited 12-month guarantee capped at EUR540,000 was provided by a company of the Stenprop group to the purchaser in respect of claims against and for liabilities of the seller under the disposal agreement.
Paul Arenson, CEO of Stenprop, says: “The sale of this asset at an attractive premium to valuation is a great result for the business and enables us to continue to deliver our strategy and focus on becoming the leading Multi Let Industrial business in the UK. We continue to make good progress with the sale of our other German retail assets and expect to be in a position to report on further progress soon.”