Last checked at 14 Jun 2017 07:00
CLS Holdings plc ("CLS", the "Group")
Acquisition of a portfolio of twelve properties in Germany
CLS announces that it has exchanged contracts to acquire a portfolio of twelve properties in Germany from Züblin Immobilien ("Züblin"), a Swiss-listed property group, for a gross asset value of €152.2 million (£134.7 million) excluding costs, representing a net initial yield of 6.3%. The properties comprise 963,596 sq ft (89,521 sqm) of multi-let office space, with a current occupancy rate of 89%, and are let to 157 tenants, with a weighted average unexpired lease term of 3.3 years. They generate a net rent of €10.1 million (£8.9 million) per annum and the top five tenants, representing 28% of contracted rent, comprise Bosch Group, Panalpina World Transport, Alpine Electronics, Level 3 Communications and The State Government of North Rhine-Westphalia.
CLS will buy eleven of the twelve properties through the acquisition of two existing Züblin subsidiaries, and the twelfth will be a direct property purchase. The cash consideration, net of the net assets acquired with the corporate acquisitions, is approximately €148 million (£131 million). The acquisition, which will be financed from internal resources, is expected to be refinanced in part with bank debt in due course, and is expected to complete in the third quarter of 2017.
Fredrik Widlund, Chief Executive of CLS, commented:
"This acquisition is a significant step towards our stated goal of increasing our presence in Germany. It will add significantly to cash flow and is in line with our strategy of identifying properties in well-located, non-prime areas of major European cities providing highly diversified tenant bases, with scope for us to drive value through local asset management opportunities. The decision to acquire this portfolio reflects our confidence in the broader German market, and many of these sites are located in cities where there is a structural shortage of office supply.
"We remain committed to delivering the best possible value for shareholders by continuing to invest in our three core markets: the UK, Germany and France."
The properties are primarily located in clusters around the major cities of Hamburg, Düsseldorf and Stuttgart and complement CLS's existing German portfolio:
Hamburg
· Albert-Einstein-Ring 17-21, Hamburg
· Nagelsweg 37-39, Hamburg
· Wandsbeker Zollstraße 11-19, Hamburg
Düsseldorf & North Rhine-Westphalia
· Roßstraße 96, Düsseldorf
· Hansastraße 2, Dortmund
· Markstraße 2, Witten
· Marler Stern 1-80, Marl
Stuttgart
· Vom dem Lauch 14, Stuttgart
· Mittlerer Pfad 2-4, Stuttgart
· Mittlerer Pfad 9, Stuttgart
Other
· Streiflacher Straße 7, Munich
· Kreuzberger Ring 24, Wiesbaden
Following this purchase, and other acquisitions and disposals since 1 January 2017, notably the sale of Vauxhall Square, London, SW8, the German portfolio will comprise 31% (31 December 2016: 23%) of the Group. The pro forma CLS portfolio based on values at 31 December 2016, subsequent disposals and costs of acquisitions, together with contracted rents in the Group, are:
Value | Contracted Rent | |||
Pro forma | 31 Dec 2016 | Pro forma | 31 Dec 2016 | |
UK | £882m (54%) | £954m (61%) | £52.6m (53%) | £52.8m (58%) |
Germany | £510m (31%) | £363m (23%) | £32.4m (32%) | £22.5m (25%) |
France | £252m (15%) | £258m (16%) | £15.1m (15%) | £15.9m (17%) |
Total | £1,644m (100%) | £1,575m (100%) | £100.0m (100%) | £91.2m (100%) |
-ends-
For further information, please contact:
CLS Holdings plc www.clsholdings.com +44 (0)20 7582 7766Fredrik Widlund, Chief Executive OfficerJohn Whiteley, Chief Financial Officer
Liberum Capital Limited+44 (0)20 3100 2222Richard CrawleyJamie Richards
Panmure Gordon (UK) Limited+44 (0)20 7886 2500Dominic MorleyAndrew Potts
Elm Square Advisers Limited +44 (0)20 7823 3695Jonathan Gray
Smithfield Consultants (Financial PR) +44 (0)203 047 2476Alex Simmons
This announcement contains inside information. The person responsible for arranging the release of this announcement on behalf of CLS is David Fuller, Company Secretary.