12 Apr 2017

Asset management yields results for M7 EREIP I at Retail Park Hildesheimer, Hanover

M7 Real Estate, the pan-European investor and asset manager which specialises in the regional, multi-let real estate market, announces that it has achieved a significant improvement in its tenancy profile and void rate at Retail Park Hildesheimer Str. 420-426, Hanover (“Hildesheimer”) due to active asset management. Rental income has increased by 10% since acquisition to €1.442 million p.a. and the remaining two vacant units are currently on the market which will result in full occupancy.

Hildesheimer was purchased by M7 EREIP I in October 2015 and is located in the southern part of Hanover. With a population of 518,000, Hanover is the capital and largest city of the German state of Lower Saxony and also hosts the annual commercial trade fairs and the CeBIT. The property comprises a retail park with four buildings positioned in a U shape around a central car parking area with a total of 9,558 sq m of retail and leisure space. Anchor tenants are well known retail brands like the supermarket LIDL, grocery store DM and the fitness company Fitness First.

On acquisition, the vacancy rate was 16.4% (1,718 sq m), the majority of which was attributable to a former disco on the 1st floor, which had been vacant for several years. The asset was in a poor condition and the majority of the tenants had short term leases and were not willing to consider prolongation of their existing lease terms. In the first month of ownership a pro-active marketing strategy was developed including a reasonable Capex and tenant incentive budget. The result has been several long term lease extensions with existing tenants, in line with the business plan. The former disco space was successfully let to a high quality Chinese restaurant on a 10 year lease and the current void rate has reduced to 7.24%.