Meritz Financial Group, a South Korean financial holding company with a market cap of Euro 1.6 billion and consolidated assets of Euro 40 billion, has acquired a 50% stake in the Vodafone complex, prime office property in Milan, from Italian REIT Coima RES.
The Vodafone complex, acquired by COIMA RES in 2016, is LEED Silver certified and is situated in Milan. The complex is the headquarter of Vodafone’s Italian operations and it is entirely leased with a WALT of more than 7 years.
The transaction values the complex at Euro 213 million (i.e. a 4% premium to acquisition price and at a 2% premium to the last appraisal value) representing an EPRA Net Initial Yield of 6.1% and a 13% levered IRR (8% unlevered IRR). COIMA RES will continue to benefit from the cash flow and upside of the Vodafone complex for its retained 50% stake.
The transaction consists in: (i) the reimbursement by COIMA RES of Euro 130 million of financing and the signing by COIMA RES of a new 5-years financing for a corresponding amount at comparable economic conditions, (ii) the contribution of the Vodafone complex and the new financing to a newly set up fund named COIMA Core Fund VIII in exchange for 100% of the funds units and (iii) the sale of 50% of the fund’s units to the Korean investor for Euro 44 million. COIMA RES will continue to consolidate the Vodafone complex given the retained governance granting COIMA RES control on major decisions, with the Korean investor acting as financial partner. The new fund will be managed by COIMA SGR without additional costs for COIMA RES.
Manfredi Catella, Founder and CEO of COIMA RES commented: “The transaction demonstrates the ability of the COIMA platform to team up with primary global investors in addition to validating COIMA RES’ portfolio valuation and increasing its diversification. The transaction generates additional firepower for further acquisitions in Milan where we already have 90% of our portfolio.”