IREIT to buy French retail portfolio for €76.8m

IREIT to buy French retail portfolio for €76.8m
B&M Claye-Souilly

Singapore-listed real estate investment trust IREIT Global has agreed to acquire a portfolio comprising of 17 retail properties located across France for approximately €76.8 million (appr. S$112.2 million).

The properties has a total gross lettable area (GLA) of 61,756 square metres (sqm) and an overall occupancy rate of 100%, along with a weighted average lease expiry (WALE) by gross rental income (GRI) of approximately 6.8 years as at 31 March 2023.

The properties are fully leased to B&M France SAS, (B&M France) a wholly-owned subsidiary of B&M European Value Retail (and together with its subsidiaries, the B&M Group).

B&M Group is a leading European discount retailer that has been listed on the London Stock Exchange since 2014.

It is currently a constituent of the FTSE100 index with a market capitalisation of approximately £4.7 billion as at 30 May 2023.

The properties are expected to generate a Net Property Income (NPI) yield of 7.9%.

Louis d’Estienne d’Orves, Chief Executive Officer of the Manager, said, “We are delighted to be acquiring an attractive portfolio of Retail Parks (Out-of-Town) properties located in wellestablished regional retail areas. In this macroeconomic environment marked by high inflation, the proposed Acquisition is in line with our strategy of strengthening our exposure to indexlinked assets in established European markets, supported by a strong blue-chip tenant. The Retail Parks (Out-of-Town) segment has outpaced the broader retail investment market. Their success is expected to continue due to their attractive yields for investors and lower rental costs for tenants, compared to other asset classes. In addition, the popularity of harddiscounters, discounters and outlet stores in France has risen exponentially to reach an estimated total revenue of approximately €12.0 billion in 2023, which augurs well for this resilient asset class. Also noteworthy is that the tenant, B&M Group, has been occupying the properties since 2005 on average.”

“This yield-accretive portfolio is in line with our strategy of diversifying our portfolio beyond the office sector and expanding our presence within Europe to enhance long term steady returns to unitholders.We will continue to leverage on the expertise of our joint sponsors-Tikehau Capital and City Developments Limited to identify potential yield-accretive acquisition opportunities in Europe that will strengthen our portfolio in scale and diversification,” Louis d’Estienne d’Orves added.

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