DGAP-News: GRR Group
/ Key word(s): Annual Results
01.12.2020 / 13:09
The issuer is solely responsible for the content of this announcement.
GRR Group Grows with Basic Retail Real Estate / Successful Placement of Three Funds with Investment Total of 1.1 Billion Euros
Nuremberg, Germany, 01.12.2020: The GRR Group continues its growth course. In the financial year for 2019/2020 (balance sheet date 31.05.2020), the leading Nuremberg company specialised in basic retail properties increased earnings by 14.2 percent to reach 6.1 million euros and was therefore considerably above the budget target. In the same period the complete turnover of the group rose by 4.4 percent from 22.5 to 23.5 million euros. The group's 70 employees manage a total of approximately 500 properties, which are mainly local supply centres, food retail outlets and discounters with a total area of almost 1,000,000 square metres and a volume of roughly 1.75 billion euros. The real estate properties are held in four open special alternative investment funds set up by the group and service mandates and individual clients.
Local suppliers remain in demand during the pandemic
"As a specialist in the area of local real estate for food retail outlets, we have succeeded in achieving further growth in spite of the current difficult conditions," explains Managing Director Martin Führlein. "We managed the first Corona wave well and the occupancy rate remains very high despite a few closures as a result of the current situation. In the crisis, the value of the basic retail segment has remained extremely stable for institutional investors. In the coming years we will continue to push our constantly good development. In the near future we plan to apply to the German Federal Financial Supervisory Authority for a marketing permit for a further investment product for professional and semi-professional investors. We also plan to further expand our business with individual clients. In addition, we will maintain a strong emphasis on the modernisation and expansion of our own portfolio. Our financial planning includes a considerable increase in investment in our properties. This will enable us to continually stabilise the average remaining rental period and the rental turnover in our real estate properties."
Three GRR funds are fully invested, a fourth fund is above target
In November 2020, the acquisition of an Edeka market in the German state of Saarland concluded the investment phase of the GRR German Retail Fund No. 3. The investment volume which was increased due to a high demand amounts to approximately 385 million euros. This means that three GRR funds with over 600 million euros of raised equity and an investment volume of more than 1.1 billion euros have been successfully issued and invested by now. The funds enable institutional investors such as pension funds, insurance companies and banks to invest capital diversely in various items of real estate of the German food retail sector.
The planned investment volume of the GRR German Retail Fund No. 4 issued in January 2020 was increased to approximately 450 million euros. The placement of the fund was terminated earlier than planned. The capital raised amounts to 258 million euros. The investment phase of the fund will probably be concluded in 2022. The newly founded company GRR Funds GmbH was commissioned for the first time to market the shares of the fund.
Sharp increase in transaction volume
In spite of increasingly intense competition, the GRR Group has once again significantly increased the number of successful acquisitions of portfolios and individual items of real estate. The transaction volume at 246.3 million euros was more than double the previous year (+129.4 percent). In November 2019 the GRR Group had acquired the "Gabius" portfolio with 41 food retail markets and discounters in ten German states, the second largest acquisition in the history of the company.
"Despite the restrictions due to the Corona virus, this year we again managed to successfully conclude numerous transactions. We have an excellent position in the market as real estate experts with portfolios in food retail even though there is naturally an enormous increase in competitive pressure due to the fact that real estate regarded as essential has become an attractive target during the pandemic. As one of the leading market players we are at the forefront," emphasizes Managing Director Andreas Freier. "For the selling side and investors it is decisive that at GRR we have extensive expertise in the area of asset management, which enables us to further develop the markets and add value. This pays off for our investors because we increase the value of the real estate."
ESG strategy for the GRR Group
In order to promote sustainable growth for the GRR Group, the company has elaborated an extensive environmental, social and governance (ESG) strategy and aligned its business objectives and practices accordingly. That includes all internal company processes and also examination of the real estate properties in the company's portfolio for potential improvements. In this context, all GRR roofs are currently successively being inspected to ascertain whether they meet structural engineering requirements in order to install photovoltaic systems. In the German state of Brandenburg a pilot project to implement this is already underway with a joint venture partner. In addition, there is also an ongoing project to find out how green areas near the markets can be environmentally improved in order to support bees.
Optimistic prospects despite Corona
In the current financial year, the GRR Group expects to continue its current growth course and forecasts a positive annual result. However, as it remains difficult to predict the development of the pandemic, a further considerable increase in turnover and earnings cannot be assumed. One of the core tasks will be to draw up individual solutions for sub-tenants especially affected by the pandemic. This is designed to sustain the occupancy rate in the managed portfolio at its current high level.
"The run on the asset class for basic retail real estate remains unabated. With the acquisition of properties, we assume that competition will continue to intensify. We are currently negotiating for the GRR German Retail Fund No. 4 and the existing individual client to make further acquisitions. In addition, at present we are preparing a new product together with a cooperation partner," explains Führlein. "Then there will be a further highlight in 2022: we have secured a contract to rent new, modern and spacious offices in the vicinity of the current location from 2022."
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About the GRR Group
GRR Real Estate Management GmbH is a real estate company specialised in retail properties in Germany, with a focus on investment and asset management. The company has its headquarters in Nuremberg and employs 70 people. GRR currently has around 500 properties under management for various investors, comprising approximately 1,000,000 square metres and valued at around 1.75 billion euros.
Find more information on the GRR Group at https://grr-group.de/.
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