Capital & Regional Regulatory News (CAL)

20 Jul 2005 07:00

Capital & Regional plc20 July 2005 20 July 2005 CAPITAL & REGIONAL plc Announcement of German Joint Venture and its first acquisitions Capital & Regional plc, the co-investing property asset manager, today announcesthe formation of a joint venture with the German property group Hahn AG, one ofGermany's leading co-investing property asset managers, to acquire and activelymanage out of town retail properties in Germany. A €110m portfolio of eight out of town retail centres comprising 68,785m(2) hasnow been assembled by the JV producing a rental income of €8.2m per annum. Thenet initial yield for the portfolio is 7%. The portfolio includes propertiesacquired from the existing portfolio of Hahn funds under management and thetenants include Metro and subsidiaries (including Real), Rewe, Edeka andDecathlon. The portfolio is to be managed by Hahn AG which will have a 10% share of thejoint venture. Hahn AG manages closed end property investment fundsspecialising in retail property throughout Germany. It was founded in 1982 andhas an established track record in the out of town retail sector, currentlymanaging closed end funds with an investment volume of €1.7bn and €660m ofequity. It is the intention that the C&R / Hahn joint venture will expand by acquiringsimilar investment properties in Germany, where the parties see potential in theout of town retail market. They are currently investigating a number ofopportunities where their joint management expertise will add value. It ishoped to be able to announce further acquisitions shortly. The Bank of Scotland has provided senior debt for six of the properties throughits Frankfurt office. The remaining two acquisitions were financed by Eurohypothrough its Dusseldorf office. The weighted average cost of debt across theportfolio is 3.9%. Martin Barber, Chief Executive of Capital & Regional, said: "In the Hahn Group we have a partner which has an undisputed track record inmanaging retail property in Germany. We recognise that property is a localbusiness and have therefore put considerable time and effort to into developingthe right management arrangements before investing. We believe that ourcombined expertise in financing and managing retail property will generateattractive equity investment returns." Bernhard Schoofs, Chief Executive of the Hahn Group, said: "This joint venture is a significant strategic development for Hahn. To datethe Hahn Group has focussed on initiating and managing closed ended propertyfunds. It will now also be an active asset manager of large space retailproperties for German and international investors. We look forward to workingwith our friends at Capital & Regional where we will both benefit from ourmutual expertise in retail property investment." - ends - For further information: Capital & RegionalXavier Pullen, Deputy Chief Executive Tel: 020 7932 8140William Sunnucks, Group Finance Director Tel: 020 7932 8125 Hudson SandlerMichael Sandler / James Benjamin Tel: 020 7796 4133 This information is provided by RNS The company news service from the London Stock Exchange