Retail Investment: Nine Supermarkets let Lidl in Romania

– Client Fund (FPAM)
– Purchase Price (Dec 2015): €10.3m
– Sale Price (2017-2021): €14.4m
– Total Profit: €4.1m
– Hold period: 5.1 years
– IRR (Levered): 43%

The portfolio consisted of 9 supermarkets let to Lidl located in regional cities across Romania. Acquired in December 2015 at a net initial yield of 11.0%, the purchase was some c.18% below its Oct-2014 valuation and benefitted from an unexpired lease term >7 years and a strong tenant covenant.

Rental increases were achieved on all 9 units within 18 months of purchase. From 2017 to 2021 the units were all sold for a combined 40% premium to their aggregate apportioned purchase price. The shareholders earned a total return of €7.05 million on an initial investment €3.01 million, an equity multiple of 2.34x.