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AMSTERDAM-Rubicon Europe Trust has bought Nike's European head office, in Holland, for euro 90.4 million ($156 million) in a debt-funded deal that will lift its gearing level to 60%. The asset, which is located in Hilversum, 30km southeast of Amsterdam, is fully leased by Nike for its headquarters for Europe, the Middle East and Africa.
This is the second acquisition this month for Rubicon Europe, and it adds 31,539 sm and five buildings to its portfolio. Last week, the REIT paid euro 145 million ($181 million) for two Belgian property companies that plan to develop five office buildings in a project known as Hermes Plaza, in Brussels. Precommitments have already been secured from Hewlett-Packard and Honeywell.
In total, Rubicon Europe has borrowed euro 328 million ($410 million) to fund the two transactions. The Hilversum property was bought from German open-ended property fund CGI, on an initial yield of 6.3%.
Rubicon managing director Gordon Fell says the acquisition would not increase the trust's 2006-07 distribution, but annual rental income would increase by euro 5.7 million ($7.11 million). The deal was debt funded, he explains, because it was better for investors not to issue new equity at today's unit price. Rubicon now owns property in Germany, Belgium and the Netherlands and is closer to achieving its pan-European investment strategy.
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