W. P. Carey Announces €41 Million Sale-Leaseback of Grocery Store Portfolio of Coop in Denmark

Eleven-Store Portfolio Leased to Leading Danish Food Retailer Coop in an Off-Market Transaction. W. P. Carey Inc. (NYSE: WPC), a leading net lease REIT specialising in corporate sale-leasebacks, build-to-suits and the acquisition of single-tenant net lease properties, just announced the €41 million sale-leaseback of 11 grocery retail stores totalling 13,100 square metres. Located across Denmark, the portfolio is net leased to Coop Danmark A/S (“Coop”), a leading Danish grocery retailer. EDC International Poul Erik Bech has been advisor to W. P. Carey.

Karolis Adlis, Senior Vice President, Investments, W. P. Carey said: We are happy to announce another grocery sale-leaseback with an established national player. The defensive nature of the asset class coupled with the strong locations of these stores made this a very attractive investment for us. The Nordic countries continue to be a key market for W. P. Carey having invested approximately €800 million in the region since our first transaction in 2001. We look forward to developing a long-term partnership with Coop as it seeks to continue expanding its market share across Denmark.”

Flemming Møller Hansen, Head of Real Estate, Coop Danmark, said: “We are excited to gain a long-term partner that believes in Coop’s take on the future of European retail and our new discount store chain, Coop365. This current sale-leaseback is a natural way for us to adjust a portion of our portfolio as we continue our expansion across Denmark with several new properties for discount stores in our pipeline.”

Helle Nielsen Ziersen, Head of EDC International Poul Erik Bech, advisor to W. P. Carey, said: “Once more, it has been a pleasure to advise and assist W. P. Carey who is one of the largest net lease REITs. We already have in-depth knowledge about Coop from prior assignments, where our collaboration has been successful and mutually fruitful. This, coupled with our previous experience with W. P. Carey, resulted in a process driven efficiently with much professionalism seen from all parties. This transaction marks the beginning of a long-term partnership, and we are looking forward to being a part of the great relationship that has been established with both W. P. Carey and Coop.”

W.P. Carey purchased a portfolio of buildings in 2018, with carrier Danske Fragtmænd as the tenant – and with EDC Poul Erik Beck as the adviser. Read more: Danish début with DKK 1.2 billion at hand.

Key Facts:

  • Market-leading tenant with well-diversified portfolio: With a history dating back to 1866, Coop is one of Denmark’s leading grocery retailers with a market share of over 30%. Coop has a well-diversified portfolio of brands accommodating all grocery retail sectors including, discount, supermarket, hypermarket and premium. With over 1,000 stores and nearly 40,000 employees, it is also one of the largest employers in the country.
  • Growing online platform: Despite its more than 150-year history, the company has continued to evolve alongside the growth of e-commerce through innovation and significant investment in technology, including its Coop app and two online businesses; Coop.dk MAD and Coop.dk Shopping.
  • Defensive industry: Ten stores in the portfolio will ultimately operate under the “Coop365” brand, Coop’s newly formed green discount supermarket, while the remaining store will continue under Coop’s “Kvickly” hypermarket brand. Proximity food retailers have benefited from increased consumer interest in at-home cooking, a trend accelerated by the COVID-19 pandemic, and discount retail in particular, has been a growing sub-sector in Denmark, taking market share from other forms of retail.
  • Attractive retail locations with high barriers to entry: The portfolio is predominantly composed of established food retail properties located in dense urban infill locations. Strict planning laws and licensing requirements in Denmark make opening new retail stores difficult, providing inherent value to established food retail sites.
  • Shared commitment to sustainability: Coop was the first grocery retailer in Denmark to announce an ambitious climate strategy in 2020, including plans to make its operations carbon positive by 2030 and to reduce its indirect emissions from suppliers, carriers and consumers by more than one million tons.
  • Long-term net leases with built-in rent increases: The stores are net leased for a term of 15 years with Danish NPI-based rent increases.

Helle Nielsen Ziersen

Partner, Director, Head of International Relations, MRICS, MDE
Phone: +45 58588717
Mobile: +45 40999946
E-mail: hni@edc.dk