Gramercy Europe, AXA Trade $1.1B Portfolio

The industrial, retail and office assets are primarily located in Germany and the Netherlands, with smaller footprints in France, Poland and the United Kingdom.

Gramercy Property Europe plc, a Europe-focused real estate investment fund sponsored by Gramercy Property Trust (GPT) and managed by a GPT subsidiary, has entered into an agreement to sell 100 percent of its assets to a consortium of clients managed by AXA Investment Managers – Real Assets, GPT announced Tuesday. The deal’s total gross valuation reportedly is about €1.0 billion ($1.1 billion), with an exit cap rate of approximately 6.2 percent.

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

Simultaneously, GPT will dispose of its 5.1 percent direct minority interest in eight Gramercy Europe properties. The two transactions are expected to result in net distributions to the REIT of about €90.7 million ($96.6 million).

Gramercy Europe (Jersey) Ltd., Gramercy’s Jersey-based investment and asset management subsidiary, will manage the assets for the buyer for one year following the closing date.

The Gramercy Europe portfolio consists of 35 assets totaling 11.6 million square feet and 100 percent occupied, according to information provided to Commercial Property Executive by a Gramercy spokesperson. The properties are primarily in Germany and the Netherlands, with smaller footprints in France, Poland and the United Kingdom, and the average remaining lease term is about eight years.

The eight properties in which GPT also owns a direct minority interest comprise eight warehouses in Germany, ranging from 73,000 to 1.2 million rentable square feet.

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

Subject to the satisfaction of customary conditions, the transaction is expected to close in the third quarter.

As of press time, AXA had not responded to CPE’s request for additional information.