Switzerland-based opportunistic residential investor Corestate Capital recently bought a further two distressed German portfolios valued at about €150m each from two separate (and so far unnamed) sellers.
The first portfolio consists of 2,400 apartments in multi-family units located across several cities in northern Germany, including Bremen and Hamburg, along with two ‘core’ commercial properties with 22,000 gross lettable area in the downtowns of Hamburg and Berlin. Corestate said they bought the portfolio ‘at a considerable discount’ to the original debt
The second portfolio, also bought at a hefty discount, is a mixed residential and commercial package scattered across several large cities in North Rhine-Westphalia, including Dortmund, Essen, Gelsenkirchen and Recklinghausen. The portfolio is currently in foreclosure and needs a complete financial restructuring, said Corestate. The company “will immediately start to reposition and stabilise and both portfolios”, it said.
Corestate’s chairman Ralph Winter said of the deal, “Looking at the German real estate market in 2013, it is clear our strategy to focus on residential properties has and continues to lead to sustainable added value in our investments.” He said he was convinced that interest in non-core residential properties, both from German and foreign investors, would continue to grow in the near future, as evidenced by the upcoming IPOs in the German residential market – principally LEG, Deutsche Annington, and perhaps Buwog, part of Austria’s Immofinanz Group.