Rowan Asset Management has agreed a €157-million refinance package with Deutsche Bank for its Andreas Portfolio, which comprises nine retail outlets in Germany. The move forms part of Rowan's long-term strategy to develop and manage properties in Germany, where the market continues to perform well.
The portfolio was purchased at the end of 2006 by Rowan on behalf of a handful of private investors. The assets are strategically managed by Rowan Europe and have enjoyed a substantial increase in value. The majority of properties in the portfolio are major out-of-town food retail outlets, with main tenants including REWE, REAL and Metro Group. The average lease length is in excess of eight years and the properties are generally located in former West Germany.
Rowan consider that whilst the rate of yield compression in Germany cannot continue unabated there is still considerable unlocked potential in the market. Nick Jacobs, Managing Director, said, "We are very encouraged by the strengthening economy which will help the markets mature and become more transparent and homogenized. This will allow more trading and asset management activity to take place."
He continued: "I see this as the second stage of the cycle for the German property market. It has opened its doors to a flood of overseas capital but as yet does not have a sufficiently straightforward transactional infrastructure or suitably established working practices to enable much asset management activity to take place. This is now changing."
The refinance was completed within two months of agreement of heads of terms. Nick Jacobs said, "Deutsche Bank offered a very focused and efficient approach to what was a complex transaction undertaken within a tight time frame."
SJ Berwin acted for the borrower, Ashurst for Deutsche Bank, with Colliers CRE valuing for the Bank.
Source: FD Tamesis