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UPDATE - First Property buys nine Lidl properties in Romania

First Property will also manage the properties, with fees worth €100,000 up-front and €125,000 per annum.
UPDATE - First Property buys nine Lidl properties in Romania
Every Lidl helps: The company is getting into the grocery market.

---ADDS BROKER COMMENT & SHARE PRICE---

AIM-listed First Property Group (LON:FPO) has bought nine properties in Romania currently being leased to supermarket chain Lidl.

The firm, along with other investors, has acquired the portfolio of properties, which has a net income of €1.16mln, for €10.5mln, representing a yield of 11% per year.

Ben Habib, chief executive, said: “Lidl is a leading retailer in Romania with a stated intention to grow its business in the country and these supermarkets are well located for their purpose.”

The investment was made with a group of other investors and was part funded by equity of approximately €4mln, of which the group invested €1mln.

The remaining equity was invested by a family office and other third parties.

First Property will also manage the properties, with fees worth €100,000 up-front and €125,000 per annum.

The balance of the funding required, of €6.5mln, was provided by the group as a bridging loan with a view to this being refinanced by a bank in the next few months. 

The cash position of the Group following this investment amounts to just over £8.5mln (€11.4mln). This will rise to over £13mln (€17.5mln) once its bridging loan has been repaid. 

The broker Arden Partners said the deal illustrated the attractive returns that could be garnered from investing in central and eastern Europe.

It added: “First Property remains attractively valued and, with £13mln of cash available once the property is refinanced, and the potential for additional third party management fees, there is good scope to grow profits further.”

At 12:55pm the shares were changing hands for 53p for a rise of 0.75, or 1.4%. This values the business at £62mln.

 

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In Romania, the group has said the outlook is “strong” and that it would be looking to growing its presence there, although in March it sold off one of its Romanian properties

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