February 23, 2024
IGD Signs an Agreement with Sixth Street and Starwood Capital for the Sale of a Real Estate Portfolio
- The portfolio, made up of 13 assets (of which 11 hyper/supermarkets and 2 shopping malls) is valued at €258 million, substantially in line with the appraisals as of 31 December 2023
- The operation will be carried out through the establishment of a closed real estate investment fund called “Food Fund”, established and managed by Prelios SGR, to which the real estate portfolio will be transferred
- Main effects on the IGD Group: collection of c. €155 million intended for the repayment of some existing loans and consequent reduction of indebtedness (LTV estimated to decrease by approximately 3.7 percentage points)
Bologna, 23 February 2024 – IGD SIIQ SpA (“IGD”) announces that it has signed agreements with Sixth Street, a global investment company with approximately 75 billion dollars in assets under management (“Sixth Street”), and companies controlled by Starwood Capital (“Starwood”), an investment company with 115 billion dollars of assets under management, and Prelios SGR SpA, one of the main real estate management and services companies in Italy, an agreement for the sale of a portfolio made up of 13 assets, for a value equal to 258 million euros, substantially in line with the book value at 31 December 2023. The closing of the transaction will take place by April 2024.
This is a portfolio made up of 8 hypermarkets (located in Chioggia, Porto d’Ascoli, Rome, Rimini, Conegliano, Ascoli Piceno and 2 in Bologna), 3 supermarkets (located in Civita Castellana, Ravenna and Rome) and 2 shopping malls (which are located in Bologna and Chioggia) which generates approximately 17 million euros in net annual rental revenues.
The operation will be carried out through a closed real estate investment fund (REIF under Italian law) called “Food Fund”, established and managed by Prelios SGR SpA, an asset management company of the Prelios Group with approximately 8 billion euros of assets under management, to which IGD will transfer the properties. 60% of the fund (class A shares with preferred return) will be held by a Luxembourg vehicle (50% Sixth Street and 50% Starwood Capital), while the remaining 40% (class B shares with subordinated return) will be held by IGD.
Net of the portion reinvested in the fund, IGD will collect approximately 155 million euros from the sale for the sale of the shares at the time of closing. In this regard, it is specified that the completion of the transaction is not subject to obtaining financing or other conditions precedent.
IGD will also sign a contract with Prelios SGR in order to continue managing project, property & facility management activities on the entire portfolio, with the aim of further enhancing it in the coming years and selling it on the market at the best possible conditions.
The disposal of the portfolio was foreseen in the 2022-2024 Business Plan and is entirely aimed at reducing the Group’s financial leverage. As a result of the transaction, to date the Loan to Value (pro-forma) is estimated to decrease by approximately 3.7 percentage points. In fact, with the proceeds of the operation, IGD will proceed with the partial early repayment of both the mortgage-backed loans on the properties sold and some additional loans, in compliance with the relevant contractual agreements, including the “€310,006,000 Fixed Rate Step-up Notes” bond due 17 May 2027”, with an expected reduction in annualized financial charges of approximately 11 million euros. Furthermore, further benefits for IGD are estimated in the income statement (due to lower operating costs and greater revenues from project, property & facility management) of approximately 2 million euros on an annualized basis.
“With this operation we are completing the implementation of the asset disposal strategy defined in the 2022-2024 Business Plan. This sale represents an important milestone because, together with the one completed at the end of 2021, it brings the total resources raised in the last 3 years to reduce the Group’s debt to around 270 million euros. In this way we will reduce the Loan to Value by approximately 3.7 percentage points”, declared Claudio Albertini, CEO of IGD.
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 €2,005.1 million at 30 June 2023, comprised of, in Italy, 19 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 center’s life cycle, leadership in the retail real estate sector: these qualities summarize IGD’s strong points. www.gruppoigd.it
Prelios SGR
Prelios SGR is a company in the Prelios Group and one of Italy’s largest asset managers, with assets under management of approx.€ 8 billion. It is active in the promotion, creation and management of real estate alternative investment funds (AIFs) and credit funds, advisory and separate account management, for leading Italian and international institutional investors. Prelios SGR is a pioneer in the innovation of investment products, as regards both asset classes and typologies. It set up one of the first externally managed SICAFs and manages the largest UTP fund in Italy and one of the largest in Europe. Prelios SGR has established high standards and control systems for governance, risk management and transparency, while maintaining high operating flexibility. Reflecting its commitment to promoting sustainability, the company is a member of the UN PRI – Principles for Responsible Investment network and of GRESB.
About Sixth Street
Sixth Street is a global investment firm with approximately $75 billion in assets under management and committed capital. Sixth Street uses its long-term flexible capital, data-enabled capabilities, and One Team culture to develop themes and offer solutions to companies across all stages of growth. Sixth Street Real Estate partners with property managers and institutional investors to invest in properties and provide flexible financing solutions across the full range of real estate asset classes. The firm has more than 500 team members including more than 200 investment professionals operating around the world. For more information, visit www.sixthstreet.com.
About Starwood Capital Group
Starwood Capital Group is a private investment firm with a core focus on global real estate. The Firm and its affiliates maintain 16 offices in seven countries around the world, and currently have 5,000+ employees. Since its inception in 1991, Starwood Capital Group has raised over $75 billion of capital, and currently has ~$115 billion of assets under management. Through a series of comingled opportunity funds and Starwood Real Estate Income Trust, Inc. (SREIT), a non-listed REIT, the Firm has invested in virtually every category of real estate on a global basis, opportunistically shifting asset classes, geographies and positions in the capital stack as it perceives risk/reward dynamics to be evolving. Starwood Capital also manages Starwood Property Trust (NYSE: STWD), the largest commercial mortgage real estate investment trust in the United States, which has successfully deployed over $95 billion of capital since inception and manages a portfolio of over $27 billion across debt and equity investments. Over the past 32 years, Starwood Capital Group and its affiliates have successfully executed an investment strategy that involves building enterprises in both the private and public markets. Additional information can be found at www.starwoodcapital.com.