RDI announces disposal of Berlin retail centre to reduce exposure

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

RDI has announced the disposal of the Schloss-Strassen Center in Berlin for €65.5 million to Benson Elliot, a UK-based private equity real estate fund manager.

In line with RDI’s strategic decision to exit its German retail portfolio, the disposal reflects a net initial yield of 6.6% assuming full purchaser’s costs and a 16% discount to the 29th of February 2020 market value.

The disposal includes the transfer of the associated €62.0 million bank facility with a maturity date of 31st of March 2020.

The Schloss-Strassen Center is a 18 600 square meter retail center located on the main retail pitch in the Steglitz-Zehlendorf area in South West Berlin and it is integrally linked to the underground transport network. The centre produces net rental income of approximately €4.7 million per annum (£4.2 million per annum) and it is anchored by Primark and Rewe. Other key tenants include Contipark, Smyths Toys and Fitness First.

This transaction reduces the group’s overall retail exposure to 24.1% on a pro-forma basis (29th of February 2020: 28.4%) and it removes a near term refinancing requirement which would have required the contribution of additional equity into a sector that the company is seeking to reduce its exposure to.

CEO of RDI, Mike Watters says the sale of the Schloss-Strassen Center is in line with the company’s stated strategy to reduce RDI’s retail exposure and to focus the portfolio on core assets in the UK market while strengthening the balance sheet.

We are pleased to have successfully concluded this disposal, particularly against a highly challenging macro-economic backdrop, and to have made further progress on our withdrawal from the German market where we now have only €50.5 million of assets still subject to disposal, all of which are at various stages of negotiation”.