Berlin-based law firm Bottermann Khorrami has provided advice in the structuring of real estate bonds with a total volume of circa €25m.
The bond issuer is a German project developer who will use the capital to acquire and upgrade value-added residential real estate throughout Germany. The real estate properties are lo-cated in German B and C cities such as Duisburg, Mainz and Minden. The bond investors are predominantly from Russia, the Baltic states and to a lesser extent from Ireland.
Dr. Esfandiar Khorrami commented: “Brexit has resulted in Russian investors turning away from the previously popular UK market. Given the uncertainty of the British market combined with its extremely volatile currency and the political risks, German real estate is now more appealing to Russian investors.”
“Foreign investors have been limiting themselves to A cities for a long time. They are now breaking out and are investing in B and C cities as well. Properties can also be bought for 12 or 13 times the annual rent in these locations at present,” continued Khorrami. “We are also seeing foreign investors accepting higher risks. They are not just restricting themselves to buying existing properties, but are also prepared to take on development risks.”
