Redefine International to sell Leopard portfolio

FTSE 250 income-focused real estate investment trust Redefine International has successfully exchanged contracts with Patrizia Immobilien AG for the sale of the Leopard portfolio for €205m.

The price reflects a 10.8% premium to the 31 August 2017 book value and the group said the disposal “capitalises on an exceptionally strong investment market” and an approximate 11% increase in the value of the euro relative to sterling over the investment period.

The portfolio comprises 66 German retail properties including a mixture of stand-alone supermarkets, foodstore anchored retail parks and cash & carry stores totalling over 138,000 square metres of lettable area. Redefine said the sale will see the company's average lot sizes increase significantly, whilst the portfolio will show an increased weighting to locations and sectors where it expects to benefit from higher rates of growth to support its medium-term target of between 2% and 5% rental income growth.

The consideration is payable in cash, which Redefine intends to recycle into new investments to enhance the quality of the portfolio and its growth prospects. It plans to reinvest at lower leverage than the company's last reported LTV of 50%. A number of investment opportunities have already been identified which are at various stages of due diligence.

In particular, Redefine said it is currently in exclusive negotiations to acquire a portfolio of high quality assets which, if acquired, would utilise the majority of the disposal proceeds.

Chief executive officer Mike Watters said: "Following the deal, our overall exposure to Germany will decline from 27% to 18% and we anticipate reinvesting the proceeds into the UK, where we are witnessing some particularly attractive investment opportunities.

“However, we remain committed owners of and investors in properties that demonstrate strong fundamentals, which coupled with an experienced team of local asset managers, ensures Germany remains a strategic market for us."

At 0900 BST, Redefine shares were down 1.6% to 38.22p.