Portfolio of shopping centers and Albert stores and sold

February 29, 2016

Properties in Prague and seven other Czech cities sold for over €100 million

Atrium European Real Estate Limited has completed the sale of a portfolio of eight Albert-anchored hypermarket centers and two associated retail parks in the Czech Republic.

Cushman & Wakefield advised Atrium on the disposal of the portfolio.

“This deal shows that well leased regional retail assets producing predictable cash flows are in high demand with a wide variety of investors,” says Alexander Rafajlovič of Cushman & Wakefield´s Capital Markets team in the Czech Republic.

Atrium group said the sale was in line with its current strategy.

“The sale of this portfolio marks an important milestone in Atrium’s evolution and continues the process of divesting our legacy nonstrategic assets in the Czech Republic. It also represents another significant step forward in our strategy of reweighting our portfolio and income towards well-established, dominant shopping centers, where we see greater opportunities to create value,” Josip Kardun, CEO of Atrium Group, said.

The portfolio comprises a total lettable area of 86,200 square meters and delivers a beneficial core plus return that Palmer Capital Continental Europe expects to increase.

Ben Maudling, managing director of Palmer Capital Continental Europe, said the transaction is a gem. “The properties are modern, well-located and fully-let, with first-class tenants. The portfolio fulfils the primary objectives of the Lighthouse entity: high-quality, secure, long-term income. This deal is the second of several similar acquisitions which we are currently pursuing,” he said.

The retail centers are in Prague and seven other Czech cities. Albert generates 82 percent of the annual rent on Ahold corporate backed leases with a 9.5-year weighted average lease term. Other tenants include Sportissimo, KIK, dm drogerie, Takko and Deichman.

Atrium is an owner, operator and developer of shopping centers in Central and Eastern Europe.

Within the past 15 months, Atrium has concluded several transactions in the Czech Republic. It bought two large scale prime shopping centers and, including the sale of this portfolio, sold 87 smaller non-strategic assets.

Despite the large reduction in the number of Czech assets, Atrium’s exposure to the Czech Republic has increased to about 18 percent of its total standing investment portfolio market value (as at 30 Sept. 30, 2015, and excluding the disposed portfolio), compared to about 16 percent at Sept. 30, 2014.

Approximately 95 percent of Atrium’s Czech Republic portfolio by value is now attributable to three prime assets that have been acquired within the last four years — Atrium Flora and the company’s 75 percent stake in Arkády Pankrác, both in Prague, and Atrium Palác in Pardubice.

Atrium owns a €2.7 billion portfolio of 82 primarily food-anchored retail properties and shopping centers with a gross lettable area of 1.2 million sqm. These properties are located predominantly in Poland, the Czech Republic, Slovakia and Russia. Atrium’s gross rental income in 2014 was €214.5 million. In addition, Atrium owns a €0.3 billion development and land portfolio offering long term future value potential.

Founded in 2007, Palmer Capital Continental Europe has offices in six countries and manages €300 million in property assets, mainly in Central Europe. The company is rapidly growing its holdings in the retail property sector.