This article is from the Australian Property Journal archive
The DB RREEF Trust has made its first foray into the European property market with a $119.6 million purchase of a portfolio of industrial properties located in France.
The portfolio has been acquired at a yield of approximately 6.9%.
The portfolio comprises six assets totalling approximately 110,000 sqm.
Five assets are located in the Paris Region and the sixth asset is located in Lyon.
The portfolio is fully leased to seven tenants, with an average lease term to expiry of 6.8 years by income to Coca-Cola, CAE and ID Logistics.
All leases are subject to annual increases indexed to the French Cost of Construction Index.
The purchase is also the first acquisition for DB RREEF in the past 12 months. In June last year, DB RREEF bought and sold a number of assets in the United States.
“This acquisition is the first investment by DRT in Europe, and is a continuation of its international investment strategy,” DB RREEF Funds Management chief executive Victor Hoog Antink.
DRT’s international holdings will increase to $1.4 billion, representing approximately 20% of the DRT portfolio by value.
DRT’s overall occupancy level will be maintained at 94.6%, while the group’s weighted average lease term will be 4.6 years, based on DRT’s December 2005 accounts.
The assets were the subject of a competitive bid, sourced for DRT by RREEF, the real estate investment management subsidiary of Deutsche Bank, in Europe.
RREEF will also provide asset management services in relation to the portfolio.
“The transaction highlights the capabilities of the RREEF global platform, and the importance of DRFM’s ongoing relationship with RREEF,” Hoog Antink added.
The transaction will be fully debt funded, increasing DRT’s gearing marginally from 41.0% to 41.9%.
By Nelson Yap
