Puma Brandenburg Limited, the AIM-listed investment company, established to invest in German residential and commercial property, has announced a further acquisition. To date, including this purchase, Puma Brandenburg has acquired a €600 million portfolio of German real estate, covering a total of 370,000 m².
Puma Brandenburg is acquiring a mixed portfolio consisting of four assets with a total lettable area of 53,177 m², of which approx 63% are hotel use, 22% retail and 5% residential. The main assets are the Cologne Hyatt Regency, a 5-star hotel with a long fixed lease, and a mixed hotel/office building located in the heart of Nuremberg with a long lease to Accor/Ibis. Other assets are a City Center shopping center in Zweibrücken and a mixed residential, retail and office building located in Mühlheim/Ruhr.
The acquisition price of €116 million (excluding associated costs) represents a price per m² of €2,181.40 and a yield on purchase price of 6.75%. The portfolio has a weighted average remaining lease length of 8.4 years, and a vacancy rate of just 4.0%.
The acquisition was sourced by Bear Stearns, acting through its Real Estate Principal Investments group, structured and arranged by Bear Stearns acting in conjunction with Shore Capital. Bear Stearns have underwritten a €101.2-million structured non-recourse debt financing package, and provided a €6.0-million Capex facility as part of the transaction.
Puma Brandenburg has invested €22.85 million of equity into a group of newly constituted special purpose vehicles to fund the purchase, and has committed a further €1 million for potential Capex programs.
The acquisition remains subject to the land registry process and other consents.
Peter Freeman, Chairman of Puma Brandenburg, commented, "Once more, we have worked with Bear Stearns, who originated this transaction from a private family seller. The structure of this portfolio will allow us to generate significant upside through active asset management, and participation in the market recovery, whereas the long and strong leases offer significant downside protection."
Philippe Vienot, Head of Real Estate Principal Investments at Bear Stearns in London, stated, "We are pleased to have arranged this complicated transaction for Puma Brandenburg. The high hotel and retail component will give Puma direct exposure to the strong economic environment in Germany at present."