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REDEFINE PROP INTERNATIONAL LTD - Redefine International P.L.C. concludes agreement to acquire three prime shopping centres in Germany

Release Date: 14/08/2013 08:00
Code(s): RIN     PDF:  
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Redefine International P.L.C. concludes agreement to acquire three prime shopping centres in Germany

REDEFINE PROPERTIES INTERNATIONAL LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2010/009284/06)
JSE share code: RIN ISIN: ZAE000149282
(“RIN” or “the company”)


Set out below is an announcement which was released by Redefine International P.L.C. (“Redefine
International”), the London Stock Exchange-listed subsidiary of RIN, on the Regulatory News
Service (“RNS”) of the London Stock Exchange today, 14 August 2013. The acquisition referred to
in the announcement below constitutes a category 2 transaction in terms of the JSE Listings
Requirements and accordingly a RIN announcement which provides further details of the
acquisition in terms of the JSE Listings Requirements has been released on SENS simultaneously
with this announcement.


REDEFINE INTERNATIONAL P.L.C.
(‘Redefine International’, the ‘Company’ or the ‘Group’)

REDEFINE INTERNATIONAL CONCLUDES AGREEMENT TO ACQUIRE THREE PRIME SHOPPING
CENTRES IN GERMANY VALUED AT EUR189 MILLION

In a significant transaction, Redefine International, the diversified income focused property company,
announces that it has exchanged contracts to acquire the entities (the “Target Entities”) owning three
shopping centres (the “Properties”) in Germany from various funds managed by CMC Capital Limited
(“CMC”) valued at EUR189.0 million (the “Transaction”) and reflecting a blended net initial yield of 5.5%.
Completion of the Transaction is subject to certain conditions which the Company expects to be fulfilled by
30 August 2013.

Overview

This Transaction, once completed, will substantially expand Redefine International’s portfolio of European
assets to approximately GBP360 million or 30% of the Company’s total portfolio by value (February 2013:
197.9 million or 19%), and which is focused on income producing assets in Germany and Switzerland.

The Properties, located in the core German investment markets of Berlin, Hamburg and Ingolstadt, are all
situated within established prime retail destinations. The Transaction is expected to produce an initial yield
on equity in excess of 12.0% with strong rental growth potential as well as opportunities to add income and
value through asset management opportunities.

Consideration and Financing

The consideration for the equity in the Target Entities of approximately EUR47.1 million will comprise a
fixed cash payment of EUR5.4 million with CMC having the option to elect to receive the remaining
consideration either entirely in cash, at a discount of approximately 4.0% to the equity value of the Target
Entities, or partly in cash and up to approximately EUR34.3 million by the issue of up to 74.9 million new
ordinary shares in the Company at an effective issue price of 40.0 pence per share (the “Consideration
Shares”). The Transaction is expected to complete by 30 August 2013 with CMC making its election to
receive any Consideration Shares in respect of all three Target Entities prior to this. Approximately
EUR20.6 million of the consideration for the equity in respect of the Berlin Target Entity will be deferred to 
6 December 2013.

Any Consideration Shares issued in respect of the Hamburg and Ingolstadt Target Entities will be subject to
lock-in arrangements for between four and six months. The cash portion of the consideration can be funded
utilising the Company’s existing resources.

As part of the Transaction, Redefine International will assume existing bank debt facilities totalling
EUR141.4 million provided by HSH Nordbank and Hypothekenbank which are fully drawn. The existing
bank loans have a weighted average maturity of 4.9 years and a weighted average interest cost of 3.12%
per annum. The gross rental income of the three Properties is approximately EUR10.9 million per annum
with a weighted average lease length of 5.4 years.
The Properties

Details of the Properties to be acquired, all of which offer the opportunity to increase income through asset
management or development initiatives, are as follows:

Schloss-Strassen Shopping Centre, Berlin

This recently developed shopping centre was opened in 2007, and is valued under the Transaction at
EUR93.0 million. The centre is located in a prime retail location in South West Berlin with strong transport
links including direct access to the Walter-Schreiber-Platz U-Bahn (underground) station and provides
approximately 19,000 sqm of retail space over six storeys, including 365 parking spaces on the upper
floors. The building is 99% occupied (by gross lettable area) and key tenants include Primark (of which it is
one of the retailer’s best performing stores), REWE, dm, Toys R Us, Fitness First and Cyperport.

As part of the Transaction, the Company will assume EUR72.0 million of existing bank debt secured
against this property from HSH Nordbank with a total interest cost of 2.94%. The facility matures on 
30 August 2017.

Bahnhof Altona Shopping Centre, Hamburg

This former Kaufhof department store, which was converted to its existing form in 2005, is valued under the
Transaction at EUR72.5 million. The centre is situated in one of the strongest retail locations in Hamburg
and is integrated with the Altona long distance overland and S-Bahn train stations, providing approximately
15,500 sqm of retail space over three storeys. The asset also has an adjacent car park offering 500
spaces. A number of asset management opportunities are at advanced stages of negotiation and offer
opportunities to add both significant value and income over the next two to four years. The building is
currently 100% occupied and key tenants include Lidl, Media Markt, McDonalds, Le Crobag and Rossman.

As part of the Transaction, the Company will assume EUR56.0 million of existing bank debt secured
against this property from HSH Nordbank with a total interest cost of 3.68%. The facility matures on 
28 February 2020.

City Arkaden Shopping Mall, Ingolstadt

The property, which was formerly used as a department store, is valued under the Transaction at EUR23.5
million. The centre enjoys a prominent location on Ludwigstrasse, one of the prime retail streets in
Ingolstadt, and provides approximately 10,400 sqm of retail space over five storeys. The building is 87%
occupied (by gross lettable area), with key tenants including H&M and Thalia.

As part of the Transaction, the Company will assume EUR13.4 million of existing bank debt secured
against this property from Hypothekenbank with a total annual interest cost of 1.15% above three month
Euribor. The facility matures on 1 June 2016.

Greg Clarke, Chairman of Redefine International, commented:

“The acquisition of these three shopping centres represents the first of two significant planned transactions
for the Company flagged in our recent Interim Management Statement. These well located shopping
centres will be attractive additions to our portfolio which will enhance the overall quality of our assets and
provide the opportunity to create both strong income returns and long-term capital growth for our
shareholders.”

Further enquiries:
Redefine International Property Management Limited
Investment Adviser

Michael Watters, Stephen Oakenfull                                         Tel: +44 (0) 20 7811 0100
FTI Consulting
Public Relations Adviser
Stephanie Highett, Dido Laurimore, Faye Walters                            Tel: +44 (0) 20 7831 3113



Sponsor to Redefine Properties International Limited
Java Capital

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