Property investor Redefine International (RDI) has agreed to buy three shopping centres in Germany for €189m (£162m). The portfolio currently generates €10.9m a year in rents, giving a purchase yield of 5.5 per cent after acquisition costs. That's lower than Redefine's existing portfolio, which otherwise consists mainly of high-yielding properties in the British regions. But the acquisition comes with €141m of stapled debt at just 3.12 per cent, so the return on Redefine's equity is much higher.
The deal marks a rebalancing of the company's portfolio towards continental Europe - now 30 per cent of assets - and towards major cities. The three shopping centres are in Berlin, Hamburg and Ingolstadt, whereas Redefine's UK retail assets are in small towns: Wigan, Coventry, Harrow, Warrington and Seaham.
