Trei Real Estate, the property arm of the German Tengelmann Group, sold a portfolio of 40 Spar leased supermarkets to Erste Asset Management on the last day of June, which Trei claims is the largest Hungarian retail portfolio transaction so far this year, according to a press release sent to the Budapest Business Journal.
The deal was closed by Erste Asset Management, which is managing funds worth almost HUF 1.5 trillion, including HUF 450 billion of real estate. Colliers International supported Trei Real Estate in the transaction, from its preparation until its successful closing. The Hungarian office of CMS Cameron McKenna provided legal advice.
With this transaction, Trei effectively consolidated its Hungarian real estate operations. Following the disposal of its portfolio in Austria, this was the groupʼs second successful delivery of its strategic goal of selling operating properties and focusing on new developments, mostly in Germany, Poland, the Czech Republic and the U.S., the group claims.
With the exception of two assets, all the elements of the portfolio are leased to Spar Hungary in the long term. The total size of the deal was in excess of 39,500 square meters, geographically spread around the entire country, including 13 locations in the capital. In the past, the properties were exclusively leased to retail chain Plus, the now defunct brand solely owned by the Tengelmann Group until its sale in 2008 to Spar Hungary, the press statement says.
“This is an important step in achieving our strategic goals. Besides consolidating in a smaller number of countries, the focus has shifted more towards development of residential properties as well as retail parks. With the sale of our portfolios in Austria and Hungary, as well as the sale of the entire logistics portfolio in the last 2.5 years, the company’s focus is now once again on growth,” said Pepijn Morshuis, CEO of Trei Real Estate GmbH.
Balázs Pázmány, chairman of the board of Erste Asset Management, said that through the transaction, the Erste Real Estate forint and euro funds have further increased their already significant retail portfolio, which already included a considerable number of retail properties leased to Spar Hungary.
“Given this transaction, the number of assets leased to our excellent partner, Spar Hungary, just got even bigger fully in line with our investors’ expectation,” said Pázmány. “The duration of income of the two acquiring funds has considerably increased, which, together with our new investments in excess of EUR 110 million, is expected to deliver robust profits to the funds’ shareholders,” he added.
“We are delighted to have been able to support the Tengelmann Group on the consolidation of its Hungarian property portfolio. With this transaction, Hungary produced the strongest first half of investment deals exceeding EUR 800 million,” said Bence Vécsey, Director of Capital Markets at Colliers. “This was an important deal following a complex process where a large number of institutional property investors participated. Following this transaction, Colliers International anticipates a great number of retail acquisitions and it is highly likely that for the first time, retail will this year play the most dominant role since the existence of modern capital markets in Hungary,” he added.