Metro Completes €700 Million Sale Leaseback of 28 Stores in Poland

Globes Online - March 28, 2004

12 Israeli investors are participating in a huge real estate deal, in which Apollo Real Estate Advisors LP and Rida Development Corp. are buying 28 German-owned Metro shopping malls in Poland for €700 million ($860 million). The Israeli investors include Israel Phoenix Assurance (TASE:PHOE1; PHOE5), Hadar Insurance and Profimex (Israel) general manager Elchanan Rosenheim, Apollo Real Estate representative in Israel.

Metro is selling shopping malls with an aggregate space of 600,000 sq.m. in six cities, including Warsaw, Krakow, Poznan, and Lodz. Metro has committed to leasing back most of the space in 20-year contracts, since its hypermarkets anchor most of the shopping malls. The rest of the space is leased to other stores in long-term contracts. The pretax return for the investors, after expenses, will be 19.8%. Some of the malls have land for future building. Metro is one of the largest supermarket chains in the world, with 2,500 supermarkets across Europe.

The €700 million investment in a project of this kind in a single country is above Apollo Real Estate's permitted ceiling as pledged to its investors. The investment was therefore split, with Apollo Real Estate and Rida investing €350 million, and €350 million being invested directly by Apollo Real Estate's investors. The 12 Israeli investors accepted the offer and will invest directly in the project. Sphere: Related Content