W. P. Carey Continues to Expand in Europe

W. P. Carey Inc. has entered into a $50.6 million sale-leaseback agreement.

Sunderland, England – W. P. Carey Inc. has entered into a $50.6 million (£32.5 million) sale-leaseback agreement, excluding acquisition costs, for a Class A office building in Sunderland, England. The transaction marks the company’s third purchase of a UK asset over the last year.

The property will be leased to a wholly-owned subsidiary of British energy company RWE npower, which is entirely owned by German utility company RWE AG.

RWE npower, which ranks as one of the UK’s leading energy companies, will guarantee the lease. Four offices have been consolidated into the facility, which will house about 25 percent of the company’s workforce.

More than 1.3 million people live within a 30-minute commute from the property, which is situated between the cities of Durham, Newcastle and Sunderland.

The office space is triple-net leased for a 10-year term and includes rent escalation in the fifth year based on the UK Retail Price Index with annual compounding.

“We are pleased to have completed this sale-leaseback transaction, marking our third acquisition in the UK over the last year. Our ability to source and structure sale-leaseback transactions and acquire existing net leased assets from developers and institutional owners in the UK affords us a wide range of attractive long-term investment opportunities. Given the creditworthiness of the tenant, parent company guarantee and the criticality of the asset to the tenant’s operations, along with the long-term lease and inflation-adjusted rent escalations, we believe this acquisition is a strong addition to the W. P. Carey Inc. portfolio,” Christopher Mertlitz, vice president at W. P. Carey, said.

In another recent European transaction, W. P. Carey has also acquired a portfolio of three modern truck and bus servicing facilities for approximately $42.9 million (€38.9 million). The properties, two of which are located in Germany and one in Austria, are net leased to wholly-owned subsidiaries of MAN SE. The agreement has a remaining term of approximately 15 years and CPI-based rent escalations.