The total value of underlying real estate assets within the scope of the transaction amounts to €1.5 Bn, to which should be added an estimated development pipeline of €530 Mn. It encompasses 10 standing and future shopping centres, representing 608,291 m².
The total purchase price paid by Unibail-Rodamco for its equity participation in the transaction amounts to €383 Mn to be paid in 2 installments: €316 Mn upon closing and €67 Mn as of June 30, 20141.
The transaction includes:
- The acquisition of a 51% stake in the holding company, which holds 90.4% of “mfi AG”, for €297 Mn. The total enterprise value of “mfi AG” amounts to €1.1 Bn, corresponding to a NIY2 of 5.5% and an average price/m² of €4,636/m² for the 5 standing assets3;
- The acquisition of a 50% stake in the Ruhr-Park shopping centre, for €86 Mn, representing a 100% asset value of €380 Mn. This reflects a NIY2 of 4.8% and an average price/m² of €3,435/m².
The agreement signed with PWREF provides:
- A put option for PWREF on all of its 49% stake from July 1, 2014 until March 31, 2017 at a fixed price of €288 Mn;
- A right of first offer for both shareholders;
- A carried-interest for Unibail-Rodamco at PWREF exit, depending upon value creation over the period.
Unibail-Rodamco and PWREF also agreed to work in partnership for future investments in Germany with the ambition to create a major player in the shopping centre segment:
- Future shopping centre developments to be exclusively performed by jointly controlled “mfi AG”;
- “mfi AG” to act as exclusive property manager for future standing assets acquired;
- Future acquisitions of standing shopping centres or development projects to be done by “mfi AG” or directly by Unibail-Rodamco and PW Real Estate funds.
Unibail-Rodamco and PWREF will have joint control4 of “mfi AG”. Unibail-Rodamco will have the option to gain full control of “mfi AG” between June 30, 2014 and January 1, 2015 through change in governance.
Germany has the highest GDP in the Eurozone with a 60 bps per annum growth overpeformance since 2005. The German economy benefits from strong fundamentals with low household indebtedness, low unemployment and expected wage growth which are expected to drive consumption growth. The German market is one of the most sought after markets for retailers and offers one of the lowest shopping centre density in Europe with 130 m² GLA per 1,000 inhabitants compared to 249 m² GLA5 per 1,000 inhabitants on average in Europe.
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