The portfolio comprises 5 hypermarkets (located in Livorno, Schio, Lugo, Pesaro and Senigallia) and 1 supermarket (in Cecina), which generate net rental income of approximately €7.7 million per year with long-term leases.
All the properties sold are “stand alone” and not connected to IGD’s freehold malls. The transaction, therefore, is in line with the Group’s strategy to focus on full ownership of the shopping center (mall + hypermarket), which allows for greater flexibility and speed when responding to market changes and tenants’ needs.
The properties will be transferred to a closed end real estate investment fund (an Italian REIF) invested by ICG and IGD and managed by Savills Investment Management SGR S.p.A. of which ICG will hold a 60% shares and IGD the remaining 40%. The goal is to further enhance the portfolio over the next few years and sell it on the market at the best conditions possible.
Net of the amount reinvested in the fund, IGD will receive roughly €112 million for the sale at the time of the closing which is expected to take place in the fourth quarter of 2021. The transaction is subject to receiving a loan for at least 50% of the assets’ value.
The disposal of the portfolio was already part of the Business Plan 2019-2021. The purpose of the sale is to reduce the Group’s financial leverage with a pro-forma Loan-to-Value which would come to 46.7% as at 30 June 2021, a decrease of 2.4 percentage points and should be even lower by year-end thanks to the positive cash flow expected to be seen in the second half; in addition to available liquidity (of approximately €44 million at 30/06/2021) the deal will also provide the Group with the resources needed to cover almost all maturities through 2022.
This transaction was completed at a time when IGD’s portfolio is showing several signs of recovery. More in detail, the latest figures show that sales for the retailers in the Group’s Italian malls were 3.7% higher than in August 2019.
Additional positive feedback comes from Fitch Ratings which confirmed the Investment Grade rating of BBB- and changed the outlook from Negative to Stable; the revised outlook reflects the greater visibility for rental income, supported by the gradual increase in footfalls and the sales of the tenants in IGD’s shopping centers.
“We are very satisfied with this transaction which testifies to the quality of our assets, sold at last June’s appraised value” Claudio Albertini, the IGD’s Chief Executive Officer said.
As already stated in the past, the gains from the sale will allow us to reduce our Loan-to Value markedly and obtain the financial resources needed to cover maturities for all of 2022; assuming that there will be no new restrictions due to a worsening of the public health situation and taking into account the good operating results, as well as the prospects for the next few months, we believe that the conditions to begin paying a dividend to our shareholders again in 2022 exist, just as we had hoped.
Chad Brown, Investment Director of Sale & Leaseback at ICG said:
This is an attractive deal for ICG, supported by strong trading performance and underlying sector fundamentals. Grocery real estate investments are a key target for the Sale & Leaseback fund as we continue to actively seek opportunities across Europe. We look forward to working with IGD and the Tenant of the properties.
For further information please contact:
Olivia Montgomery
Associate Director
Corporate Communications
Tel: +44 (0)203 545 1543
Mobile: +44 (0)7812045188
Email: [email protected]
About ICG
ICG provides flexible capital solutions to help companies develop and grow. We are a global alternative asset manager with over 30 years’ history, managing $65bn of assets and investing across the capital structure. We operate across four asset classes: Structured and Private Equity, Private Debt, Real Assets, and Credit.
We develop long-term relationships with our business partners to deliver value for shareholders, clients and employees, and use our position of influence to benefit the environment and society.
ICG is listed on the London Stock Exchange (ticker symbol: ICP). Further details are available at www.icgam.com. You can follow ICG on LinkedIn and Twitter.
About IGD – Immobiliare Grande Distribuzione SIIQ S.p.A.
Immobiliare Grande Distribuzione SIIQ S.p.A. is one of the main players in Italy’s retail real estate market: it develops and manages shopping centers throughout the country and has a significant presence in Romanian retail distribution. Listed on the Star Segment of the Italian Stock Exchange, IGD was the first SIIQ (Società di Investimento Immobiliare Quotata or real estate investment trust) in Italy. IGD has a real estate portfolio valued at circa €2,267.88 million at 30 June 2021, comprised of, in Italy, 25 hypermarkets and supermarkets, 27 shopping malls and retail parks, 1 plot of land for development, 1 property held for trading and 6 other real estate properties. Following the acquisition of the company Winmark Magazine SA in 2008 14 shopping centers and an office building, found in 13 different Romanian cities, were added to the portfolio. An extensive domestic presence, a solid financial structure, the ability to plan, monitor and manage all phases of a centre’s life cycle, leadership in the retail real estate sector: these qualities summarize IGD’s strong points.
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