W.P. Carey & Co., a specialist in sale-and-leaseback deals, acquired a fund that owns 20 wholesale stores in Italy from Metro AG in a transaction valued at 300 million euros ($408 million).
The purchase includes the assumption of about 180 million euros of loans secured by the properties and provided by Italian and French lenders, New York-based W.P. Carey said today in an e-mailed statement. Metro, Germany’s largest retailer, disclosed the sale in a separate statement.
“What investors are looking for is a cash yield supported by a long lease to a single user, usually a household name like Metro,” Cabot Lodge, W.P. Carey’s president and head of European investments, said in a telephone interview.
The leases for the properties run for about 16 to 18 years, generating a rental income equivalent to about 8 percent of the properties’ value, excluding the effect of debt, Lodge said.
The stores, located in northern and central Italy, were purchased by W.P. Carey’s CPA:17 - Global fund. BNP Paribas Real Estate, an arm of the Paris-based bank, will continue to manage the fund that owns the “cash and carry” stores, while Metro will retain a small minority stake in the vehicle.
It’s the first acquisition in Italy for W.P. Carey, which manages about $3.5 billion of real estate outside the U.S. The company plans to double that figure over the next five years, Lodge said.
W.P. Carey has done 600 million euros of deals elsewhere in Europe during the past 12 months, according to the statement.