Gramercy Closes $1.1B Sale of Euro-Portfolio

The transaction includes 35 assets totaling 11.6 million square feet, fully occupied. The properties are primarily in Germany and the Netherlands, with smaller footprints in France, Poland and the U.K.

Warehouse in Langenbach, Germany, leased to DSV Stuttgart
Warehouse in Langenbach, Germany, leased to DSV Stuttgart GmbH & Co.

Gramercy Property Europe has completed its previously announced sale of all of its assets to a consortium of clients managed by AXA Investment Managers—Real Assets.

The deal’s total gross valuation reportedly is about €1.0 billion ($1.1 billion), with an exit cap rate of about 6.2 percent. The transaction resulted in net distributions to Gramercy Property Trust of €90.8 million ($103.8 million).

Under the terms of the sale, Gramercy Europe (Jersey) Ltd., the parent company’s Jersey-based investment and asset management subsidiary, will continue to manage the assets for the buyer on a fixed-fee basis until July 2018.

Other European dispositions

Gramercy also announced that last week it had disposed of one of its two remaining properties in the Goodman U.K. joint venture, a JV with the Goodman Group of Sydney. The property in South Normanton, U.K., was sold for £15.2 million ($19.8 million), or about a 6.0 percent disposition cap rate. The remaining asset in the JV is a 187,000-square-foot property in the Brackmills Industrial Estate in Northampton, U.K., that is currently being marketed for lease, after which Gramercy expects to put it up for sale.

The Gramercy Europe portfolio comprised 35 assets totaling 11.6 million square feet, fully occupied. The properties are primarily in Germany and the Netherlands, with smaller footprints in France, Poland and the U.K. The average remaining lease term is about eight years.

About 82 percent of the portfolio consists of industrial assets, some 13 percent of specialty retail and roughly 5 percent of office assets, all as weighted by GPT-attributable annualized base rent.