CORESTATE, a specialist real estate investor based in Zug, Switzerland, announces it has acquired a German mixed-use commercial and residential portfolio with a market value of €290 mln/CHF 355 mln out of a special situation.
The commercial assets are located in metropolitan areas such as Berlin, Bonn and Freiburg and comprise of six office buildings, which are let to a German blue-chip company. The buildings yield steady cash flows and are characterised by debt restructuring and redevelopment potential.
The residential assets comprise of 6,000 units which are located across major cities in North-Rhine-Westphalia (NRW). The buildings are acquired out of a forced administration and have already been recapitalised. Yet, the assets are characterised by a maintenance backlog and require a substantial amount of capital investment.
The portfolio has been purchased at an average rental yield of 9%, which is expected to compress over time as the underlying assets improve on the account of CORESTATE`s asset management performance. The parties agreed to keep the sales price confidential.
Ralph Winter, Founder of CORESTATE Capital comments: "This transaction perfectly fits our investment strategy as CORESTATE is ideally positioned to recapitalise debt and equity and reposition single assets to unveil intrinsic values of the underlying real estate. Although non-core in its risk profile, debt financing for the portfolio was readily obtainable from various lenders who value our active asset management approach and track record in asset turn-arounds.
"Our club deal approach shows that there is significant investor interest even in transactions in the range of €300 million and above. We therefore decided to expand our investor relations team by hiring further expertise to realise club deals in a volume of €1bn and more.”