Acquisition of three industrial properties
21 August 2018
ACQUISITION OF THREE NETHERLANDS INDUSTRIAL PROPERTIES FOR €20 MILLION
Schroder European Real Estate Investment Trust plc ("SERE" or the "Company"), the company investing in European growth cities, announces that it has exchanged contracts to purchase three industrial assets in the Netherlands for a total purchase price of €19.8 million, reflecting a combined net initial yield of 6.5%, with a weighted unexpired lease term of approximately 9 years.
· In Venray, the Netherlands, SERE has acquired a freehold 15,290 sqm warehouse, fully let to logistics specialist De Klok Logistics, on a new 10 year lease. The Venray / Venlo region sits next to the German border and the Ruhr region. It is regarded as one of the premier logistic locations in Europe, providing both domestic and European distribution capabilities via its excellent road, rail and ports connectivity.
· In Houten, in the Utrecht province, SERE has acquired a modern freehold 9,149 sqm warehouse which is 100% let to Inventum, a specialist in water heating and boilers, with an unexpired lease term of 8 years. The property is located in the established de Meerpaal Business Park, home to more than 100 occupiers from a cross section of industries. Utrecht is one of the fastest growing regions in the Netherlands; with both GDP and population expected exceed national averages[1] and benefits from its central location, favourable road, rail and port accessibility, education facilities and position as a major employment hub.
· SERE has also acquired a modern, 2,500 sqm mixed use building in Utrecht, fully let on a multi tenanted basis, with an unexpired lease term of approximately 8 years. The property is located in the established De Wetering business park, fronting the A-2 motorway.
On completion of the acquisitions, the portfolio will comprise 12 properties with a value of approximately €222 million. The portfolio will generate contracted rents of €16.1 million with an average unexpired lease term to first break and expiry of 5.1 years and 6.7 years (per end of June 2018). The acquisitions provide further sector diversification, with the portfolio having the following allocations; 49% office, 29% retail, 13% industrial and 9% mixed use.
The Company has now redeployed the majority of net proceeds raised from the July sale of two low yielding Casino supermarkets, part of the Company's investment strategy to actively manage the portfolio to grow income and total returns. Along with the Rumilly logistics acquisition announced in July, the Company has already replaced 90% of foregone Casino income and has a remaining investment capacity of approximately €15 million.
Completion of the transactions will occur towards the end of August (Houten) and September (Venray and Utrecht).
Jeff O'Dwyer, at Schroder REIM, commented:
"We have been actively looking to further diversify the portfolio and increase the Company's allocation to the high growth industrial and logistics sector. These assets are in established industrial locations and offer a stable income profile with growth upside from broader improving city and regional fundamentals. With prime Dutch logistic yields breaking 4.5% we see value in smaller lot sizes, particularly in locations where investment and occupier demand is strong.
"These acquisitions demonstrate our ability to leverage Schroders' European investment expertise to identify new investment opportunities and quickly recycle proceeds from disposals, capitalising on opportunities to realise profit and deliver share holder value."
Enquiries:
Duncan Owen/Jeff O'Dwyer
Schroder Real Estate Investment Management Limited Tel: 020 7658 6000
Ria Vavakis
Schroder Investment Management Limited Tel: 020 7658 2371
Dido Laurimore/Richard Gotla Tel: 020 3727 1000
FTI Consulting
[1] Source: Oxford Economics, March 2018
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