SEGRO Web Site - July 3, 2007
SEGRO has exchanged contracts on its largest ever transaction in Continental Europe, the sale and leaseback from Neckermann (a KarstadtQuelle group company) of a major office and distribution campus in Frankfurt for €197m, including all acquisition costs. This follows SEGRO’s 2005/06 €163m acquisition of a major logistics portfolio and landbank from KarstadtQuelle AG in a sale and leaseback transaction.
The property is located approximately 4km from the centre of Frankfurt on Hanauer Landstraße, the main artery running east from the city, near to the new European Central Bank building, which is currently under construction.
The assets comprise a total of 30 ha and has a built area in excess of 310,000m², including some 86,000m² of high quality office space. The remainder of the site includes high and low bay warehousing, flexible business space, a large data centre and some small retail units.
Approximately 83% of the income from the site (occupied entirely by Neckermann) is secured on leases of at least 10 years, with the remaining space, principally offices that have been let to other Karstadt group companies or to Neckermann’s contractors, leased on shorter terms, thus representing a refurbishment / redevelopment opportunity in the medium term.
(Bloomberg quotes Harm Meijer, an analyst at JPMorgan Chase & Co. in London, as saying annual rental income represents a net 7.9 percent of the purchase price after costs, with rents pegged to consumer price inflation.)
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