W. P. Carey Announces $102 Million (€87 Million) Investment in Supermarket Portfolio

Rhea-AI Summary

W. P. Carey Inc. (NYSE: WPC) has announced a $102 million (€87 million) sale-leaseback of a 27-property supermarket portfolio in Northern Spain and the Balearic Islands. This transaction brings the total investment volume for 2020 to approximately $700 million. The portfolio spans 481,000 square feet and is leased under three 20-year agreements to Eroski, a major food retailer in Spain. The deal highlights Eroski's market dominance, the portfolio's strategic locations, and long-term leases with CPI-based rent escalations, contributing positively to WPC's investment growth.

Positive

• Secured a $102 million sale-leaseback transaction, boosting 2020 investment volume to $700 million.
• The portfolio is anchored by Eroski, a leading supermarket chain with over 1,600 stores in Spain.
• Triple-net leases are structured under three 20-year contracts, ensuring stable rental income.
• The assets are located in high-demand areas with limited local competition, increasing property value.

Negative

• None.

NEW YORK, Nov. 3, 2020 /PRNewswire/ -- W. P. Carey Inc. (NYSE: WPC), a leading net lease REIT specializing in corporate sale-leasebacks, build-to-suits and the acquisition of single-tenant net lease properties, today announced a $102 million (€87 million) sale-leaseback of a 27-property supermarket portfolio located in Northern Spain and the Balearic Islands, bringing total investment volume for the year-to-date period to approximately $700 million. The portfolio comprises a total of 481,000 square feet (45,000 square meters) and is triple-net leased under three 20-year master leases to Eroski Sociedad Cooperativa ("Eroski"), one of the largest food retailers in Spain.

Key Facts:

• Market-leading grocery chain: Established in 1969, Eroski ranks among Spain's largest supermarket chains, operating over 1,600 retail stores. Eroski is committed to creating a seamless omnichannel experience by investing in new technologies and digitalization having launched an online supermarket and mobile app for online grocery ordering.
  
  
• Established locations with high barriers to entry: The portfolio is predominantly located in dense residential neighborhoods with limited local competition across Northern Spain and the Balearic Islands where Eroski holds the dominant share of the food retail market. Strict planning laws and licensing requirements create significant barriers for new entrants, thereby increasing the inherent value of the proven sites.
  
  
• Expanding industry: The Spanish food retail market has demonstrated consistent growth driven by rising shopper spending on consumer staples, with demand remaining largely unaffected by COVID-19. All facilities in the portfolio have seen steady sales growth over the past four years.
  
  
• Commitment to sustainability: Eroski remains committed to reducing its impact on the environment through several initiatives including implementing eco-design packaging, mandating sustainable fishing practices, minimizing the environmental impact of its logistics and transportation operations and robust waste management.
  
  
• Long-term leases with built-rent growth: The assets are triple-net leased under three 20-year master leases with Spanish CPI-based rent escalations.

Christopher Mertlitz, Executive Director, Investments, W. P. Carey said: "Due to our longstanding commitment to building strong tenant partnerships, we were able to secure this off-market transaction with an existing tenant to acquire a portfolio of high-quality supermarket assets. Our experience structuring and closing transactions in the Spanish market was critical in achieving a timely close. We look forward to continuing to grow our real estate footprint in Spain and to building on our partnership with Eroski."

W. P. Carey Inc.
W. P. Carey ranks among the largest net lease REITs with an enterprise value of approximately $18 billion and a diversified portfolio of operationally critical commercial real estate that includes 1,215 net lease properties covering approximately 142 million square feet as of September 30, 2020. For nearly five decades, the company has invested in high-quality single-tenant industrial, warehouse, office, retail and self-storage properties subject to long-term net leases with built-in rent escalators. Its portfolio is located primarily in the U.S. and Northern and Western Europe and is well-diversified by tenant, property type, geographic location and tenant industry.

This press release may contain forward-looking statements within the meaning of U.S. Federal securities laws. A number of factors could cause W. P. Carey's actual results, performance or achievement to differ materially from those anticipated. Among those risks, trends and uncertainties are the general economic climate, including the continuing impact of the COVID-19 pandemic; the supply of and demand for commercial properties; interest rate levels; and other risks associated with the acquisition and ownership of properties, including risks that the tenants will not pay rent, or that costs may be greater than anticipated. For further information on factors that could impact W. P. Carey, reference is made to its filings with the U.S. Securities and Exchange Commission.

Institutional Investors:
Peter Sands
W. P. Carey Inc.
212-492-1110
institutionalir@wpcarey.com

Press Contact:
Guy Lawrence
Ross & Lawrence
212-308-3333
gblawrence@rosslawpr.com

 

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SOURCE W. P. Carey Inc.

FAQ

What recent investment did WPC announce in November 2020?

WPC announced a $102 million investment in a 27-property supermarket portfolio in Northern Spain and the Balearic Islands.

What is the significance of Eroski for WPC's investment?

Eroski is one of Spain's largest supermarket chains, providing a stable tenant for WPC's investment.

How much total investment volume has WPC achieved in 2020?

WPC's total investment volume for 2020 is approximately $700 million.

What type of leases are associated with the newly acquired supermarket portfolio?

The portfolio is triple-net leased under three 20-year master leases with Spanish CPI-based rent escalations.

How large is the supermarket portfolio acquired by WPC?

The supermarket portfolio spans a total of 481,000 square feet (45,000 square meters).