Key Takeaways
- • IGD SIIQ SpA has signed agreements with Sixth Street Partners (AUM: $75 billion) and Starwood Capital Group (AUM: $115 billion) to sell a 13-asset real estate portfolio valued at €258 million, substantially in line with December 31, 2023 appraisals.
- • The portfolio comprises 8 hypermarkets, 3 supermarkets, and 2 shopping malls across Italian locations (Bologna, Rome, Rimini, Chioggia, and others), generating approximately €17 million in annual net rental revenues.
- • The transaction will be executed through a closed real estate investment fund called "Food Fund," established and managed by Prelios SGR, with closing expected by April 2024.
- • IGD will collect approximately €155 million from the sale, which will be deployed to repay existing loans and reduce leverage, with loan-to-value (LTV) estimated to decrease by approximately 3.7 percentage points.
Summary
IGD SIIQ SpA announced on February 23, 2024, the execution of binding agreements for the sale of a strategically significant real estate portfolio to two major global alternative investment firms. Sixth Street Partners and entities controlled by Starwood Capital Group, along with Prelios SGR as the fund manager, will acquire the portfolio for €258 million—a valuation that aligns with the company's independent appraisals as of year-end 2023.
The portfolio comprises 13 properties focused on food retail and community shopping centers across Italy. The holdings include 8 hypermarkets distributed across Chioggia, Porto d'Ascoli, Rome, Rimini, Conegliano, Ascoli Piceno, and two locations in Bologna; 3 supermarkets in Civita Castellana, Ravenna, and Rome; and 2 shopping malls in Bologna and Chioggia. These assets generate approximately €17 million in annual net rental revenues, providing a stable income stream that underscores the portfolio's quality.
The transaction structure involves establishing a closed real estate investment fund designated "Food Fund," which will be established and managed by Prelios SGR, one of Italy's leading real estate management and services companies. This vehicle will serve as the acquisition entity for the entire portfolio, facilitating the transaction and potentially enabling future value creation through professional asset management.
From a financial perspective, IGD projects to collect approximately €155 million in proceeds, which will be allocated primarily to the repayment of existing debt obligations. This deleveraging strategy is expected to reduce the company's loan-to-value ratio by approximately 3.7 percentage points, strengthening IGD's balance sheet and improving its financial flexibility. The transaction is anticipated to close by April 2024, providing clarity on the timing of these capital benefits.
The portfolio comprises 13 properties focused on food retail and community shopping centers across Italy. The holdings include 8 hypermarkets distributed across Chioggia, Porto d'Ascoli, Rome, Rimini, Conegliano, Ascoli Piceno, and two locations in Bologna; 3 supermarkets in Civita Castellana, Ravenna, and Rome; and 2 shopping malls in Bologna and Chioggia. These assets generate approximately €17 million in annual net rental revenues, providing a stable income stream that underscores the portfolio's quality.
The transaction structure involves establishing a closed real estate investment fund designated "Food Fund," which will be established and managed by Prelios SGR, one of Italy's leading real estate management and services companies. This vehicle will serve as the acquisition entity for the entire portfolio, facilitating the transaction and potentially enabling future value creation through professional asset management.
From a financial perspective, IGD projects to collect approximately €155 million in proceeds, which will be allocated primarily to the repayment of existing debt obligations. This deleveraging strategy is expected to reduce the company's loan-to-value ratio by approximately 3.7 percentage points, strengthening IGD's balance sheet and improving its financial flexibility. The transaction is anticipated to close by April 2024, providing clarity on the timing of these capital benefits.
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