Brack Capital considering fresh capital raise for German investment

Listed Brack Capital Real Estate Investments NV is considering raising fresh capital in a bid to further benefit from its exposure to the German market, and said there were good post-Brexit opportunities in the US and UK debt markets. The company is active in the US, Russia and Germany.

The company, headquartered in the Netherlands but listed on the London exchange, said that during 2016 its German platform has continued to expand its income producing portfolio, buying properties exceeding €80.0 million in value and around 700,000 lettable sqm in the country, in Kiel, Hannover and in North Rhine-Westfalia.

The company is facing steady depreciation on its Russian assets, mainly retail-centric properties which are heavily exposed to the suffering Russian consuer markets. In Germany the company has a large income-producing portfolio of €1.2bn and a development division of 250,000 sqm of up-market residential in Grafental, Düsseldorf. The group's Germany division is targeting €122m full-year 2016 profits.

Brack's German commercial holdings include 380,000 sqm of lettable space in 32 income-producing assets in high demand areas, mostly in western Germany. The holdings have high (96%) occupancy rates; The diverse portfolio includes shopping centers, power centers, retail parks and DIY centres. Main tenants include discounter Kaufland and home improvement chain OBI.

Residential holdings include 9,900 apartments totaling 570,000 sqm in good-quality neighborhoods in Leipzig, Hanover, Bremen, Kiel, Essen, Dortmund and other mid-sized cities in North Rhine-Westphalia, Germany’s most populous state. The units feature high (96%) occupancy rates, and strong potential for rent growth, says Brack. Its latest statement says its residential average new lettings are now 28% higher than the portfolio average, with its residential and commercial portfolios are valed at 8bps and 40bps above their respective benchmarks.