W. P. Carey Buys Automotive Dealership Portfolio for $33M

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W. P. Carey Inc. WPC recently announced the buyout of a portfolio of four automotive retail and service sites, spanning approximately 201,000 square feet of space in the Netherlands, for nearly $33 million. The deal is an off-market transaction.

The triple-net leased portfolio is rented to Van Mossel Automotive Group — a market-leading Dutch automotive retail and leasing services provider — for a term of 17 years. With an annual inflation-based rent escalation tied to Dutch CPI, the lease agreement enjoys built-in rent growth.

The portfolio is strategically situated in prime locations of the Randstad region of the Netherlands. Notably, the region accommodates 40% of the country’s population and is a hub for important business centers. A fitting location will enable the company to easily back-fill any vacancy, in future, at the property at favorable terms.

The acquisition is in line withthe company’s efforts to strengthen its footprint in Netherlands. Notably, W. P. Carey has been making concerted efforts to expand its presence in the Netherlands. In fact, since 2002, it has acquired nearly $840 million worth assets across different sectors and asset classes.

Also, the property is leased to a dependable tenant. Van Mossel engages in a diversified range of retail, leasing and service offerings, along with a portfolio of top-class brands. This diversity offers the company business stability, making it less sensitive to market cycles.

Moreover, Van Mossel is expected to utilize nearly $4 million of transaction proceeds in the facilities, reflecting portfolio strength and the company’s long-term commitment to it.

Per management, the acquisition will enable the company to enjoy robust risk-adjusted returns, leveraging on a strong automotive company that has steady cash flow and revenue source. 

The company recently reported third-quarter adjusted funds from operations (AFFO) of $1.48 per share, beating the Zacks Consensus Estimate of $1.43. Further, during the Sep-end quarter, it completed four acquisitions worth $259.7 million. These new acquisitions will drive bottom-line growth in the near term.

Performance of Stocks in the Same Space

Cousins Properties Incorporated CUZ reported third-quarter 2018 FFO per share of 16 cents, surpassing the Zacks Consensus Estimate by a whisker. Furthermore, the figure came in higher than the prior-year tally of 15 cents.

Highwoods Properties Inc. HIW reported third-quarter 2018 FFO of 86 cents per share, outpacing the Zacks Consensus Estimate. Additionally, the figure remained flat year over year.

Ventas, Inc. VTR reported third-quarter 2018 normalized FFO of 99 cents, beating the Zacks Consensus Estimate of 97 cents. However, the figure came in lower than the year-ago quarter tally of $1.04.

Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.

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W.P. Carey Inc. (WPC): Free Stock Analysis Report
 
Highwoods Properties, Inc. (HIW): Free Stock Analysis Report
 
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