Germany's Aareal Bank has provided a £290 million senior loan to Redevco, the Dutch retail investment company, to finance the acquisition of 16 retail warehouses across the UK it has bought from Oxford Properties.
The transaction, at £518 million, is one of the largest retail property transactions in the UK market in 2024, as reported. The price paid implies a loan to value of 55%.
It is Aareal Bank’s first tie-up with Redevco, which is owned by Cofra Holding, a privately held group of companies.
Redevco bought the portfolio through a share deal transaction from Oxford Properties and M7 Real Estate.
It encompasses approximately 2.1 million square feet of net internal area and is anchored by a mix of tenants, including well-established brands in the food, DIY and discount sectors.
The assets are in core urban centres across the UK, with a strong concentration in the South and around Southeast England.
The portfolio was pieced together by M7’s Box+ III fund. Canadian investment giant Oxford Properties bought M7 in 2021, as reported, principally to build a European logistics portfolio of scale.
The portfolio comprises: Euro Retail Park, Ipswich; Hailsham Retail Park, Hailsham; Weston Retail Park, Weston-super-Mare; Imperial Retail Park, Gravesend; St Peters Wharf Retail Park, Maidstone; The Pompey Centre, Portsmouth; Chelmer Village Retail Park, Chelmsford; Bolton Gate, Bolton; West One Retail Park, Manchester, Eccles; North Trading Estate, Tunbridge Wells; Gapton Hall Retail Park, Great Yarmouth; The Causeway Halfords and Homebase, Staines; Tollgate West Homebase, Colchester; Neatscourt Retail Park, Queensborough, Isle of Sheppey; Poole Retail Park, Poole; and Parc Pemberton Retail Park, Llanelli.
“Our first financing with Redevco, a leading European retail investor, is setting a benchmark for the industry,” said Severin Schoettmer, managing director special property finance at Aareal Bank, in a statement. “This transaction, one of the largest retail deals in the UK in 2024, highlights our ambition and commitment to financing prime retail transactions with top players across Europe and beyond.”
Manolito van Ardenne, CFO of Redevco added: “Partnering with Aareal Bank enhances our UK portfolio in resilient retail segments, aligning with shifting consumer preferences shaped by e-commerce trends. This acquisition, bringing our pan-European retail parks platform’s gross asset value to circa €5 billion , represents a robust cash flow which we expect to increase to a yield north of 6.5% once live asset management initiatives complete."
Aareal Bank acted as the arranger, facility agent and security agent for the transaction. Eastdil Secured served as the exclusive financial advisor for this transaction. The legal advisory roles were taken on by Pinsent Masons for Aareal Bank and CMS for Redevco, Knight Frank provided valuation services to Aareal Bank.