W. P. Carey Acquires $92M Retail Portfolio in Croatia from Agrokor

By Adriana Pop, Associate Editor

In a $92 million sale-leaseback deal, W. P. Carey has purchased five retail stores from Agrokor in Croatia.

The acquisition cost of the assets has been divided between two of W. P. Carey’s publicly-held non-traded REIT affiliates, Corporate Property Associates 17 – Global Incorporated (or CPA®:17 – Global) and Corporate Property Associates 18 – Global Incorporated (or CPA®:18 – Global), on a 20 percent and 80 percent ratio, respectively.

Three of the properties are located in the capital city of Zagreb, while the remaining two stores are located in the major coastal tourist destinations of Split and Zadar.

The entire portfolio is leased to Konzum – the largest food retailer in Croatia and Agrokor’s principal subsidiary – on a 20-year triple-net basis. Konzum controls 30 percent of the food retail industry in Croatia and 40 percent of the market in the nation’s capital city.

“While there is a trend among investors to reduce their exposure in Eastern Europe, W. P. Carey has continued to be a valuable long-term partner and alternative source of capital for Agrokor.  This relationship has become particularly important as we prepare for a potentially large acquisition and expansion in the region,” Ivica Todoric, Agrokor’s founder & president, said in a news release.

With approximately 40,000 employees, Agrokor is Croatia’s largest private company. The company is also the country’s largest food retailer, producer, processor, and distributor. In 2012, Agrokor generated approximately €4 billion (nearly $5.46 billion) in total revenues and €363 million (about $495 million) in EBITDA (earnings before interest, taxes, depreciation, and amortization).

“With this transaction closed, we have completed approximately $460 million (€350 million) of total European investment volume for 2013, many of which were all-cash acquisitions which utilized our large equity base.  We have successfully closed a range of long-term net-lease investments and sale-leasebacks across Europe this year, demonstrating our ability to source transactions at attractive yields in both established Western European markets as well as more challenging Eastern European markets,” added Jeffrey Lefleur, managing director of W. P. Carey Europe.