“It’ is quite an unusual opportunity where we will be able to acquire high quality assets with cheap financing and still be able to hold a high income return,” Stephen Oakenfell, Chief Operating Officer of the diversified income- focused property company, Redefine International told CNBC Africa.
The three properties are valued at 189 million euros and offer a blended net yield of 5.5 per cent. Once the transaction is complete, it will expand Redefine International’s [DATA RIN:REDEFINE PROP INT LTD.] portfolio of European assets by 30 per cent to approximately 360 million British pounds REDEFINE PROP INT LTD
The acquisition includes the 19,000 square meters Schloss Shopping Centre in Berlin, the 15,000 square meters Bahnhof Altona shopping centre in Hamburg and the 10,000 square meters City Arkaden shopping mall in Ingolstadt.
Oakenfell stated that the assets are situated within prime retail destinations and are well integrated with the transport links throughout Germany.
He added that the assets will provide them with the opportunity to increase income returns as well as long term capital growth for the company’s shareholders.
“Although we are buying for a relatively low yield in terms of prime assets, we will have the opportunity to increase both income and value,” said Oakenfell.
While other companies would hesitate investing in Europe due to its current economic conditions, Oakenfell believes that Redefine International investing in Germany is the right move.
“There are still some lingering concerns about Europe but we see Germany as being very different. It’s a very stable economy. With the latest economic figures that came out, Germany is outperforming a number of western European economies,” he explained.
Oakenfell added that the acquisition sit well within the group’s strategy in terms of upgrading their current portfolio as they have been investing in Germany for some time and understand the markets quite well.
According to the group, these kinds of acquisitions will allow Redefine International to provide local South African investors the opportunity to access first world property markets in Europe.