17 Aug 2020

M7 Real Estate sells retail portfolio to FIM Group for €86.4 million

M7 Real Estate (M7), the pan-European investor and asset manager, announces the off-market sale, on behalf of M7 ISLAY (the “Fund”), of a portfolio of 27 retail properties in Germany, to the FIM Unternehmensgruppe (“FIM Group”) for €86.4 million.

The portfolio, which includes a mix of high quality, food anchored tenants, comprises a total rental area of 72,594 sq m. The assets are 92% let to a range of occupiers including Lidl, Netto, Edeka, Rewe, Dänisches Bettenlager and SIEMES Schuhcenter GmbH & Co. KG. The largest single asset, which is on Hildesheimer -Strasse in Hannover, comprises 10,710 sq m of space.

Having acquired the properties in separate transactions over 2015 to 2016 on behalf of the Fund, M7 implemented an active management strategy involving capex projects, securing new leases and restructuring existing leases. As a result, M7 has increased the occupancy of the portfolio from 80% to 92% and extended the unexpired lease term to six years.

M7 ISLAY is a discretionary fund aimed at high net worth individuals, family offices and institutional investors. The Fund invested around €440 million in industrial, retail and office properties in Germany and the Netherlands, comprising a total of c. 453,000 sq m of lettable space.

Alyssa Huse, Managing Director of M7 Real Estate in Germany, said: “This sale is in line with our business plan and has delivered attractive returns for our investors. Leveraging our asset management expertise, we have improved the performance across the portfolio, attracting a diverse occupancy base to these well located assets and creating an attractive market proposition.”

“We see good potential for value enhancement in the portfolio, and we want to continue the path already taken by M7 by optimizing individual properties,” says Jan Lerke, the FIM Group’s Managing Director responsible for real estate management. “In this regard, we are holding talks with initial operators. The retail package is particularly interesting for us because of the individual locations in major cities such as Hanover or Saarbrücken,” concludes Lerke.

Luther Rechtsanwälte acted as M7’s legal advisor.

In conjunction with taking over the property and asset management of the portfolio, DIWG Deutsche Immobilien Wirtschafts GmbH of Dusseldorf carried out the commercial due diligence for FIM. The legal aspects of the acquisition were facilitated by the Munich-based commercial law firm ZIRNGIBL Rechtsanwälte Partnerschaft.