C&W advises Eroski on €85.5M Sale & Leaseback

W. P. Carey Inc. (NYSE: WPC), a leading net lease REIT specializing in corporate sale-leasebacks, build-to-suits and the acquisition of single-tenant net lease properties, today announced a €85.5 million sale-leaseback of a 27-property supermarket portfolio located in Northern Spain and the Balearic Islands, bringing total investment volume for the year-to-date period to approximately $700 million. The portfolio comprises a total of 481,000 square feet (45,000 square meters) and is triple-net leased under three 20-year master leases to Eroski Sociedad Cooperativa («Eroski»), one of the largest food retailers in Spain. C&W advised the vendor.

Key Facts:

• Market-leading grocery chain: Established in 1969, Eroski ranks among Spain’s largest supermarket chains, operating over 1,600 retail stores. Eroski is committed to creating a seamless omnichannel experience by investing in new technologies and digitalization having launched an online supermarket and mobile app for online grocery ordering.
  
• Established locations with high barriers to entry: The portfolio is predominantly located in dense residential neighborhoods with limited local competition across Northern Spain and the Balearic Islands where Eroski holds the dominant share of the food retail market. Strict planning laws and licensing requirements create significant barriers for new entrants, thereby increasing the inherent value of the proven sites.
  
• Expanding industry: The Spanish food retail market has demonstrated consistent growth driven by rising shopper spending on consumer staples, with demand remaining largely unaffected by COVID-19. All facilities in the portfolio have seen steady sales growth over the past four years.
  
• Commitment to sustainability: Eroski remains committed to reducing its impact on the environment through several initiatives including implementing eco-design packaging, mandating sustainable fishing practices, minimizing the environmental impact of its logistics and transportation operations and robust waste management.
  
• Long-term leases with built-rent growth: The assets are triple-net leased under three 20-year master leases with Spanish CPI-based rent escalations.

Christopher Mertlitz, Executive Director, Investments, W. P. Carey said: «Due to our longstanding commitment to building strong tenant partnerships, we were able to secure this off-market transaction with an existing tenant to acquire a portfolio of high-quality supermarket assets. Our experience structuring and closing transactions in the Spanish market was critical in achieving a timely close. We look forward to continuing to grow our real estate footprint in Spain and to building on our partnership with Eroski.»

W. P. Carey Inc.
W. P. Carey ranks among the largest net lease REITs with an enterprise value of approximately $18 billion and a diversified portfolio of operationally critical commercial real estate that includes 1,215 net lease properties covering approximately 142 million square feet as of September 30, 2020. For nearly five decades, the company has invested in high-quality single-tenant industrial, warehouse, office, retail and self-storage properties subject to long-term net leases with built-in rent escalators. Its portfolio is located primarily in the U.S. and Northern and Western Europe and is well-diversified by tenant, property type, geographic location and tenant industry.