Griffin Real Estate sold off 75 percent of its share in the retail and office portfolio of Echo Investment to Redefine Property, a South African REIT. Echo will keep a 25 percent stake in the portfolio, which has been valued at €1.2 bn. Market watchers say that the price of the transaction exceeds Echo’s book value, thanks to strong demand for real estate assets and Echo conservative book policy. The deal, that’s expected to take about a year to close, still needs to be approved by European Commission.
The portfolio includes only standing, income generating assets, but the buyer, which is a major player on the South African market, has already secured rights to be first in line to buy additional Echo assets once they’re completed. Echo’s landmark projects under construction include Q22 offices and the 100,000 sqm Jupiter retail project, for which Griffin is reportedly seeking a strategic investor. Griffin says the transaction will fuel Echo’s growth in Poland, as well as make it possible for Griffin to expand into other markets.
“The negotiation process has brought a long-term strategy for the company based on the newly-acquired capital. Our goal is to create a leading investment fund for the Polish market, dedicated to retail and office sectors,” said Maciej Dyjas, co-CEO of Griffin Real Estate.
Griffin said it will also seek to be raising additional capital from more than one stock market.
