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The largest sale and leaseback transaction of 2006

Dawnay Day Group has purchased 22 Interfruct cash-and-carry stores from the Hungarian property developer, SCD Group, for €82.5 million, representing an initial yield of 7.8% (net of acquisition costs).

The transaction is the largest sale & leaseback deal in the Hungarian retail market to date. Jones Lang LaSalle advised Dawnay Day Group in the transaction. The portfolio units are located in Budapest (5 units) and all major regional cities throughout Hungary, and have a total gross lettable space of 105,000 square meters. The properties are situated on land plots totalling 345,000 square meters, several of which offer development potential in the longer term.

Interfruct founded in 1989, is Hungary’s largest cash-and-carry retailer with a turnover exceeding €200 million in 2005. The purchaser, Dawnay, Day Group’s subsidiary, Dawnay Day Carpathian Plc, is a property investment company active in Central and Eastern Europe. The company has property investments in Poland, Hungary, the Czech Republic and Ukraine. SCD will continue to operate the stores, leasing them from the buyer for the next 15 years on a triple-net basis.

The average rent represents €5/ square meters /month. Furulyás Ferenc, Head of JLL Capital Markets Hungary added: „This transaction certainly creates a milestone for sale&leasebacks of retail portfolios. We see that there is tremendous interest for this type of product and we expect to see similar transactions in 2007.”