Since the start of the pandemic, the challenges faced by traditional brick and mortar retail with store closures and bankruptcies being announced at record rates, has been a major topic for the CRE industry. One retail segment – the supermarket – faced record high sales, making it an investors dream. Read on for the numbers and what it can mean for investors, as well as what can change in the future.
Also making headlines last week was a new funding for a venture by Jaguar Land Rover; a positive sign for all car lovers out there.
The European CLO universe also saw news last week, with Dutch authorities delaying the implementation of the new CLO tax program by six months. It was too late for some managers who already moved their deals to Ireland in preparation.
Grocery Stores Have Become Dream Properties
Throughout the pandemic and global lockdowns, food shops across Europe have been one of the few retailers allowed to trade and, with everyone home, business has been strong. The Wall Street Journal reported that U.K. grocer Sainsburys sales increased by 9.3% during the 9 weeks leading up to January 2nd. Grocery stores have become “dream properties” for landlords, with their highest Christmas sales on record.
Unlike other retailers during this time, landlords behind grocery stores did not struggle to collect rent. In fact, supermarket income reportedly received 100% of rents owed, compared to just 79% for Westfield, according to the Wall Street Journal.
Jaguar Land Rover Secures Funding for Logistics Centre
Jaguar Land Rover’s 2.94 million-square-foot Global Parts Logistics Centre at Mercia Park has secured around £330 million of funding. The transaction is Europe’s largest ever single-occupier build-to-suit transaction with Intermediate Capital Group and IM Properties partnering to fund the scheme, which will service 80 countries and Jaguar Land Rover’s aftermarket business, on 20-year leases for each of the five unites, according to Logistics Manager.
Europe’s CLO Managers Shift to Ireland
A 21% annual value-added tax was scheduled to be applied to the management and administration fees of CLO special-purpose vehicles next month in the Netherlands. As a result of this, nearly all managers of CLO domiciled in the Netherlands are reportedly planning to move their vehicles to Ireland in order to avoid a Dutch Tax Change.
A last minute decision by Dutch authorities, reported by Bloomberg Tax, to delay the implementation of this tax by six months, came in too late for most managers. Data from Atlantic Star Consulting, shows that at least 16 managers migrated to Ireland before this news, meaning only seven CLO transactions from managers remain in the Netherlands.
H.I.G. Affiliate Invests in Makios
CLO Manager H.I.G. Capital, LLC (“H.I.G.”), a leading global alternative investment firm with $43 billion of equity capital under management, announced that one of its affiliates has invested in Makios Logistics SA, according to Street Insider. Makios is a “leading provider of integrated logistics services and a market leader in temperature controlled warehousing in Greece.”
Head of H.I.G. Europe said that the sector: Industrial & logistics real estate continues to be an attractive asset class at a European level and Makios is strongly positioned to capture an increasing share of trade flows.
CMBS Surveillance: Recent European Special Notices
Deal Name: INTU SGS
Special Notice: Issuer announces STID Proposal and the Issuer Proposal have been approved; Documentation to give effect to the proposals approved in the STID Proposal and Issuer Proposal will be entered into by, inter alios, the Issuer and the Obligor Security Trustee as soon as practicable hereafter.
Deal Name: DECO 2014-TULIP
Special Notice: Following the redemption of the Notes on the 27/Oct/2020 IPD, Issuer has requested Euronext Dublin to remove the Notes from the Main Securities Market of Euronext Dublin.
Deal Name: TAURS 2019-3UK
Special Notice: Statement in regards to cancellation policy waivers and rent rebates offered as a result of COVID-19 restrictions.
Deal Name: EURO 35 Loan Name: Portfolio Senior Loan
Special Notice: Sale of Gottlieb-Daimler-Strasse 6, Neu Wulmstorf property completed on 8/Jan/2021; As a result of disposal, an amount equal to €5,615,622.50 has been applied as mandatory prepayment of the Senior Loan; Securitised Senior Loan has been prepaid by an amount equal to €3,928,235.76 and such amount will be applied against the Notes at the Jan/2021 IPD.
- Karolina Necel
Compliments of Trepp – a member of the EACCNY.