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LONDON (Alliance News) - Schroder European Real Estate Investment Trust PLC late Tuesday said it has purchased two grocery anchored retail investments located in Rennes and Anglet in France, acquiring a 70% stake in the two properties for more than EUR43.0 million.
Schroder will acquire the freehold properties under a joint venture with the seller, Mercialys, which will retain a 30% interest.
The joint venture has an initial term of six years, at which point the pair will evaluate whether to sell the properties or not.
Schroder has paid EUR43.2 million for the 70% stake, reflecting a net initial yield of 5.0%. The assets are generating revenue and rented out on 12-year leases to firms Casino and Boulanger.
The majority of income is from Casino, one of France's leading hypermarket operators, Schroder said.
The investments are subject to a one-time purchase option, exercisable by Casino on the second anniversary of the acquisition date. This is exercisable only under specific conditions. The net-to-seller strike price for exercising this option is EUR44.8 million for Schroder's 70% interest.
Schroder European shares closed down 0.9% to 107.50 pence per share on Tuesday.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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