German portfolio
German portfolio:
The Group invests in and manges a commercial retail property portfolio in Germany through its joint venture with AREA Property Partners. As at 30 June 2010, the portfolio consisted of 48 properties throughout Germany with a total floor space of 5.0 million sq ft. The portfolio is managed by Garigal Asset Management GmbH, in which the Group holds a 30% stake.
The Group's investment in Germany, which began in 2005, is held through a series of Jersey companies, which either own the properties directly or through interests in German limited partnerships. Since October 2008, the Jersey companies have been held in a 50:50 joint venture between Capital & Regional and AREA. The Group owns a 48.8% effective share in the underlying portfolio due to various minority interests in the underlying German entities.
The investment criteria are as follows:
Established out-of-town retail locations, typically anchored by food retailers with strong financial covenants;
Large stand-alone hypermarkets and retail parks, with sales areas of more than 3,500 sq m with substantial land and car parking; and
Strongly cash generative with additional asset management opportunities, generally through shorter leases
The Group's exposure to euro-denominated assets is reduced by borrowing in euros and hedging most of the remaining net investment through forward contracts. Income is not hedged.
Top ten tenants by rental income (2009)
| % | |
| Metro/Real | 37.6 |
| Edeka | 9.5 |
| REWE/Toom | 8.7 |
| Coop | 7.1 |
| Prakiter | 6.2 |
| Roller | 5.6 |
| Schwarz/Kaufland | 4.1 |
| Hagebau | 1.9 |
| Globus | 1.3 |
| Aldi | 1.3 |
Germany key statistics
| At 30 June 2010 |
At 30 December 2009 | |
| Gross property asset value | €580m | €592m |
| Number of properties | 48 | 50 |
| Number of units | 191 | 193 |
| Initial property yield | 6.82% | 6.80% |
| Equivalent yield | n/a | n/a |
| C&R share | 48.8% | 48.8% |
| Bank debt | €475m | €482m |
Related links
