DGAP-News: GRR Group successfully initiates ESG turnaround / Specialists for local shopping properties grow in difficult market environment

Press release

GRR Group successfully initiates ESG turnaround / Specialists for local shopping properties grow in difficult market environment

Nuremberg, 07.12.2021: The GRR Group is developing successfully even in the challenging environment of the Corona pandemic. In the 2020/2021 financial year (reporting date 31 May 2021), the consolidated earnings of the leading Nuremberg-based company specialising in local shopping properties grew by 10.8 percent from 6.1 to 6.8 million euros. The total turnover of the group decreased by 4.8 percent from 23.5 to 22.3 million euros in the same period and thus corresponds to the level of the previous years. The number of employees rose to currently 74. They manage around 500 local supply centres, food retail markets and discounters nationwide with a total area of over 1,045,000 square metres.

The volume of assets under management was increased from approximately 1.75 to 1.95 billion euros. The properties are held in four self-initiated open-ended special AIFs as well as in service and individual mandates. Another fund is in preparation.

GRR shapes the ESG turnaround

"We are very satisfied with our development. The business year was marked by the special challenges of the pandemic. However, we used the time to agree new, long-term contracts with many of our tenants. At the same time, we initiated the ESG turnaround and developed a new fund to drive our sustainability strategy. We have aligned all business goals and practices with environmental, social and corporate governance criteria - ESG for short. We will continue to make this offer to our investors - because local food retailers are particularly stable in value as an investment when they are sustainable. The demand for ESG-compliant properties that promise higher profitability in the long term is constantly increasing," explains Martin Führlein, member of the GRR Group Executive Board.

Fourth GRR fund making good progress

After GRR completed the investment phase for GRR German Retail Fund No. 3 last year, three GRR funds have now been placed and invested with a total of more than EUR 600 million in equity raised and more than EUR 1.1 billion invested. The planned investment volume of GRR German Retail Fund No. 4, which was launched in January 2020, was increased again and now stands at around 485 million euros. Equity of 258 million euros was acquired for the fund. The investment phase is expected to be completed in 2023. The funds enable institutional investors such as pension funds, insurance companies and banks to invest their capital in a broadly diversified manner in local supply properties with a focus on food retail.

Against the backdrop of growing investor interest in taking sustainability criteria into account when investing capital, the GRR Group is developing a new investment strategy with which institutional investors can invest in food retail real estate oriented towards the taxonomy and disclosure regulations of the European Union.

"We are optimistic that we will be able to launch these new fund offerings as early as 2022. In our view, the real estate sector has a key role to play in the climate turnaround. In the case of retail properties, we see particular potential for improvement through energy refurbishment, new construction according to green building standards and the increased use of renewable energy sources. With our fund, we want to send a signal that the real estate industry can do more to achieve the climate goals," Führlein says.

From portfolio holder to asset manager

After the record year 2019/2020, the transaction volume has declined against the backdrop of the pandemic and the increasingly tough competitive environment. Nevertheless, the fund business remains a growth driver. The GRR Group's high demands on the properties to be acquired have only slightly slowed down the portfolio expansion, however, and the transaction volume is still significantly above that of 2018/2019. Meanwhile, asset management has increased; numerous properties have been and are being extensively refurbished and upgraded, which contributes to the significant increase in value of the real estate portfolio.

"Investor interest in local shopping properties as investments remains high. We have successfully concluded numerous transactions in a difficult environment with, in some cases, considerable corona-related restrictions," emphasises Board Member Andreas Freier. "Our investors know and appreciate that we select the stores and local shopping centres we acquire according to strict criteria in order to further develop and upgrade them. There are only a few players in the market who have as many years of expertise in the Basic Retail segment as the GRR Group and are able to consistently increase the value of the properties in the portfolio."

Sustainability in focus

In addition to increasing the value of the properties, the GRR Group also invests in renewable energies and ecological projects around the retail properties in line with the alignment of its business objectives with environmental, social and corporate governance goals. For example, the GRR Group has brought on board a joint venture partner, WI Energy, who has begun to install photovoltaic systems on all suitable roofs in GRR's own portfolio. In addition, green spaces at the markets are being designed as bee meadows at numerous locations.

"With the ESG-oriented optimisation of food retail properties, we also address new investor groups if we succeed in sustainably developing these retail properties as long-term competitive and stable investment products," Freier says. "We know from our survey for the GRR Basic Retail Report that ESG criteria have a high relevance for investment decisions. Investors attach the greatest importance to the environmental aspect in their investment strategy, also in view of the problems of climate change. This is crucial for our guiding principle when acquiring new properties."

Outlook in difficult times

The successful financial year makes the GRR Group cautiously optimistic that it will be able to continue on its growth path in 2022. The further development of the pandemic situation in Germany will be decisive.

"Food retailing has proven to be an anchor of stability in Corona times. Local suppliers continue to be where people reliably buy groceries even in difficult times. Accordingly, investors achieve stable returns with discounters, supermarkets and retail parks. This will also succeed in the coming year," Führlein is confident. "Then the GRR Group will also move into new, more modern and larger offices here in Nuremberg. Because we also want to grow strongly in the coming years."

Contact person:

Martin Führlein

Board of Directors, GRR Group

Tel.: +49 (9 11) 955126 200 | E-Mail: [email protected]

Press contact:

Matthias Struwe

Eye Communications, Press and Public Relations Agency

Phone: +49 (7 61) 137 62-21 | E-mail: [email protected]

About the GRR Group

The GRR Group is a group of companies specialising in retail real estate in Germany with a focus on investment and asset management. The company is headquartered in Nuremberg and employs 74 people. The GRR Group currently manages around 500 properties for various investors with a total area of around 1,000,000 square metres and a volume of approximately 1.95 billion euros.

More information on the GRR Group is available at www.grr-group.de.