RDI cuts retail exposure with German disposal

The real estate investment trust says retail property now make up less than a quarter of its total portfolio.

RDI REIT has disposed of another German shopping centre as it cuts its exposure to the retail sector to focus on its core property portfolio in the UK. The real estate investment trust is selling the Schloss-Strassen Center in Berlin to private equity real estate fund Benson Elliot for €65.5 million.

RDI, previously called Redefine International, has been repositioning its portfolio to increase its weighting to London and the South East of England and to provide greater exposure to its hotel and serviced office properties.

The REIT said the transaction reduced its overall retail exposure to 24.1% on a pro-forma basis, down from 38.4% in February, and removed a near-term refinancing requirement which would have required the contribution of additional equity into a sector that it is trying to reduce its exposure to. The Schloss-Strassen Center produced net rental income of about €4.7 million a year and is anchored by Primark and Rewe, with other key tenants including Contipark, Smyths Toys and Fitness First.

RDI said it now had just €50.5 million of assets still subject to disposal in Germany, all of which were at various stages of negotiation. The proceeds of the Schloss-Strassen sale would be used to strengthen its balance sheet.

We are pleased to have successfully concluded this disposal, particularly against a highly challenging macroeconomic backdrop, and to have made further progress on our withdrawal from the German market,” CEP Mike Watters said.

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