Redefine Int. announces disposal of €106m German office portfolio

Mike Watters, CEO of Redefine International.
Mike Watters, CEO of Redefine International.

Redefine International has announced that it has completed the sale of four German office assets for a gross consideration of €106 million. The assets, which were disposed of via a share sale, were held in a joint venture with the Menora Mivtachim Group.

The Company’s 49% proportionate share reflects an 8.6% premium to the book value. It is intended that Redefine International’s net proceeds of €24.9 million, which includes a performance fee of €2.4 million, will be reinvested into value accretive opportunities and used to reduce debt.

The properties, situated in Berlin, Dresden, Cologne and Stuttgart, total 45,145 sqm (485,937 sqft), and are let to a German government-backed social insurance body, VBG, on a combined WAULT of just under seven years. The portfolio generated a total annual gross rental income of €8.1 million of which €4.0 million was attributable to Redefine International.

In 2012, the Company entered into a joint venture agreement with Menora, one of Israel’s largest insurance and pension funds, in order to undertake certain co-investments in properties located in Germany. The agreement reflected a common investment strategy of acquiring high quality real estate, leased to strong covenants on long-term leases. At the time, Menora identified Redefine International as having the necessary deep-seated experience and market understanding to source suitable investments, manage the acquisition process and provide the subsequent asset management services.

Mike Watters, CEO of Redefine International commented:

“In line with our strategy to continuously improve the quality of our portfolio, these four offices were identified for sale. We are very pleased with the transaction having achieved an impressive 27% IRR over the investment period. The proceeds from this successful and timely sale, which were enhanced by the current strength of the Euro, will be reinvested into value accretive assets and used to effectively reduce debt. This is in line with our stated aim and commitment to focus on delivering superior income-led total returns.”