Hamborner REIT shifts focus to retail, divests office properties

German property company Hamborner REIT is changing its investment strategy to focus more on retail properties, especially those in the food and DIY sectors, and less on office buildings. 

Eizenhandel, Karlsruhe

This is because the retail market is stable, while the office market is facing significant changes.
The company will become a "retail REIT," concentrating on local supply retail properties and DIY stores.
They will continue to target "core" properties with stable income but will also invest in "core plus" properties (offering more return with moderate risks) and "manage-to-core" properties (where they can add value through improvements), maintaining the latter at 10-20% of the portfolio.
Hamborner REIT will be more flexible, considering retail properties valued under €10 million and expanding its search beyond metropolitan areas to include medium-sized cities and rural supply locations across Germany.
Beyond existing food retail and DIY chains, they will seek tenants from other fast-moving consumer goods (FMCG) segments like drugstores, discount retailers, household goods, pet supply stores, and selected high-turnover textile formats.
The goal is to reduce office properties to 10-20% of the total portfolio medium-term through selective sales, re-investing the capital into retail properties. They may reduce this further in the long term.
By shifting to retail, Hamborner aims to maximise growth while maintaining an attractive risk and return profile.
Hamborner REIT owns a diverse portfolio of high-income commercial properties across Germany, valued at approximately €1.4 bn. Its portfolio primarily consists of attractive retail properties such as large retail stores, retail parks, and DIY stores located in busy areas of large and medium-sized German cities (city centres, district centres, and popular out-of-town sites), alongside modern office buildings in well-established locations.