Slate Asset Management has agreed to buy the 188-property German grocery-anchored retail portfolio of x+bricks Group. Toronto-based Slate will make the acquisition in two tranches for approximately $1.5 billion.

The portfolio will be a significant addition to Slate’s existing holdings in Germany, which the company says comprises over 220 properties. In total, Slate says it has transacted on over 650 needs-based retail assets in the country.

“We are very pleased to be increasing our exposure to high-quality, daily-needs-based real estate in Germany, which we believe is a stable and defensive asset class with a positive growth outlook,” Brady Welch, co-founding partner of Slate Asset Management, said in the announcement early Wednesday.

“Our ability to source and execute a transaction of this scale demonstrates the strength of Slate’s global team, the depth and breadth of our regional relationships and our access to flexible capital through trusted partners who understand the value we bring to bear as investors and managers.”

Slate’s portfolio in the country is “underpinned by Germany’s largest grocery and everyday goods distributor” the company states.

Upon closing, Slate will become one of the leading owners and operators of daily-needs-based retail real estate in Germany.

The transaction remains subject to closing conditions and regulatory approvals. No timeline has been provided for completion of the acquisitions.

x+bricks founder to exit company

Sven Vollenbruch, senior vice-president at Slate Asset Management in Germany, noted the company plans to “continue strategically investing across our portfolio to provide our tenants with high-quality spaces that meet the wants and needs of their customers.

“We look forward to further modernizing these properties with new infrastructure that will enhance their sustainability and convenience, with the goal of making these assets even more efficient, healthy and attractive to tenants and end-users.”

x+bricks Group founder and CEO Sascha M. Wilhelm will sell his interest in the company and exit from its management. Jorgen Verink, CFO of x+bricks Group, will take over the CEO's role.

“Fuelled by the fascination to drive and grow new ideas, we have developed x+bricks into a leading platform for grocery-anchored retail properties in Germany over the past five years,” Wilhelm said in the release.

“This success has been driven by a great team of partners and employees, whom I would like to thank today. 

“Following last year's transactions, we succeeded in profitably selling the entire x+bricks portfolio to a strategic and proven investor in this asset class with outstanding capabilities to further develop the assets."

The transition and Slate's history in Europe

Custodia Trust Beteiligungsgesellschaft mbH, owned by Berlin-based entrepreneur and investor Harald Christ, will continue to hold its stake in x+bricks Group until the portfolio is fully transferred to Slate.

To assist in the onboarding of the portfolio, x+bricks will temporarily provide transitional services for Slate.

“In recent years, we have created a high-quality portfolio through numerous value-adding acquisitions and investments,” Stefan Hohmann, managing director and head of investment at x+bricks group, said in the announcement.

“We are pleased to pass on our best-in-class portfolio to Slate for further development now. This rapid and successful growth has been part of x+bricks' identity since its inception.”

Slate Asset Management has been investing in the European real estate market since 2016.

Its strategy is focused on acquiring, owning and operating cash-yielding, daily-needs-based real estate assets such as grocery; pharma or other health-care services assets; and affiliated warehouses and logistics assets. 

Globally, Slate’s daily needs-based real estate portfolio comprises nearly US$5 billion in assets under management.

In addition to its holdings under Slate Asset Management, the firm is also a significant unit holder in Slate Grocery REIT, a North American-based owner and operator of retail properties in the United States.

Goodwin Procter, Mellum Capital, Gleiss Lutz, KPMG, PwC, Gleeds, and R3define advised Slate on this transaction. 

Evercore, White & Case, EY and Fieldfisher advised x+bricks.

About Slate, x+bricks Group 

Slate Asset Management is a global alternative investment platform targeting real assets.

Its platform has a range of real estate and infrastructure investment strategies, including opportunistic, value-add, core-plus and debt investments.

x+bricks is a grocery-anchored real estate in Germany.

The company, which has developed the software solution PATA for real estate analyses, focuses on long-term contracts with a strong credit tenant base as well as high demand for space with low vacancy rates.

x+bricks was founded in 2018 and comprises of approximately 190 properties throughout Germany.