M.Ehrich/ Archiv GAGFAH
Global real estate advisory firm Situs said last week that it had got the mandate as the primary and special servicer for the recent €700m Gagfah CMBS German Residential Funding 2013-2 Limited securitisation, part of the listed multifamily residential investor's comprehensive refinancing programme.
The new CMBS issue, arranged by Bank of America Merrill Lynch and Deutsche Bank, provides for the refinancing of three sub-portfolios within Gagfah’s stable comprising the €367.5m WGN loan, €350.2m WBN loan and the €1.07bn NILEG Residential loan.
Bruce Nelson, chief operating officer of Situs worldwide, (but operating about half his time out of London nowadays, he tells REFIRE) commented, “This latest appointment increases our new servicing mandates in 2013 to £3.3 billion and further demonstrates our expertise and deliverability of refinancing through securitisation.”
The German Residential Funding Limited 2013-2 comprises 29,0296 rental units across Germany (the Quadriga Portfolio) representing about 1.4m sqm of lettable space. The Quadriga Portfolio is located across northern Germany, the former West Germany and Berlin, and benefits from a stable tenant base with a current weighted average tenancy term of about 12.7 years. The aggregate value of the Quadriga Portfolio is around €1.19 billion.
Gagfah, which owns 144,000 residential units and manages a further 35,000 for third parties, has been on a surge of refinancing in recent months, partly coinciding with the arrival of new CEO Thomas Zinnöcker from GSW Immobilien in March this year, which has seen over €4bn refinanced over the last nine months. Gagfah has reduced overall interest rate expenses to 3.1% from 4.35% at end-2012 and loan-to-value ratio to 62% from 65%, and more than doubled average maturity to 6.2 years. The €358m Malibu loan, to mature in October 2014, is the only refinancing left on the table, it said in a statement.
This latest €700m transaction, which was 1.6 times oversubscribed, has a 2.1% coupon and a duration of five years, and completes the group's intermediate financial restructuring enabling it to concentrate on operations, the company said. This would include the disposal of 11% of its portfolio, primarily assets in non-core regions, i.e in remote locations.
Gagfah also said it plans a €250m value-enhancing investment program over the next five years, expected to add €0.02 to FFO per share each year. Investments are to be financed through sales, which are expected to contribute €50m of net cash annually. The firm confirmed its FFO share guidance for 2013 of €0.59-€0.61 and €0.79-€0.82 next year.
In a bullish statement on the group's refinancing recently, CEO Zinnöcker commented "We are excited to have secured yet another refinancing at such attractive terms. Refinancing more than €4bn of debt in such a short time and doing so at significantly lower interest rates is a great success, while lowering our overall cost of debt by more than 100bp compared to the end of last year gives a significant boost to our FFO profile. Combined with our planned capital expenditurs, our operational improvements and our portfolio strategy, we are about to turn around the company in a very short time and lead it into an extremely promising future."