Summary
Credo European Properties Limited (Fund “ll”) was established to provide investors with an opportunity to invest in a diverse portfolio of commercial properties in the United Kingdom and Europe. Fund ll has targeted an IRR of 12% p.a. Fund ll closed on 31 March 2006, having raised equity of £34 million.
This report covers the two and a half years to October 2008.
The fund is 97% invested and the remaining equity is committed.
Since inception:
• gross assets of approximately £130m have been acquired in 18 separate transactions;
• 6 investments have been sold resulting in a return of capital of approximately £9.2m;
• the remaining equity of £1.06m (3% of the initial capital raised) has been committed to existing developments;
• £14.4m (42.3% of the initial capital raised) has been returned to investors over the two and a half years since inception
• the remaining net asset value of the properties held by the fund is £23.97m
The NAV per share is £75.42
As at 31 October 2008, Fund II has generated a total return on investment of 17% (This return is based on the realised value to date as well as a revaluation of the remaining assets.)
Equity invested
Equity of £32.94m has been invested to date as set out below:
Current
• 85 Volkswagen showrooms (UK) £0.63m
• 15 Hilton Hotels (UK) £5.96m
• 13 Burger King outlets (Germany) £1.64m
• An office investment in St Austell, Cornwall (UK) £0.42m
• 19 ATU auto parts and service centres (Germany) £0.31m
• 9 ATU auto parts and service centres (Austria) £0.09m
• portfolio of 4 GWB shopping centres and a clinic/medical facility (Germany) £1.16m
• Wohncenter (Switzerland) £4.29m
• 3.26% stake in an AIM-listed group, CareCapital Group Plc £0.78m
• 50% stake in Surrey development £1.8m invested plus a further commitment of £2m
• 88% stake in a call centre in Warrington let to Car Phone Warehouse £3.84m
• A retail outlet let to Rewe (Germany) £2.8m
Sold
• 5 Ashbourne Nursing Homes (UK) £4.57m
• 15 Netto supermarkets (Germany) £0.58m
• 6 GWB shopping centres (Germany) £1.02m
• 24.9% stake in a retail portfolio of 29 properties (Germany) consisting of: £3.03m
• Toom Portfolio - 1 do-it yourself hardware supermarket and
• Peugeot Portfolio - 4 Peugeot car showrooms.
• Marilyn / Netto Portfolio - 24 discount supermarkets
Recent Transactions
In July 2008 Fund II invested £2.75m in Redfields Sarl which owns 3 retail units in Germany. The portfolio was acquired at a gross yield of 8.35% and has a weighted average lease term of 5.6 years. There are a number of opportunities to add value and increase cash flow that are currently being pursued and include lease regearing and development/extension of existing units. The portfolio was acquired with 100% equity – and finance will be sought at an appropriate time.