Corestate divests €432m club deal development project in Vienna

Corestate Capital Holding, a Luxembourg-based investment manager and co-investor, has divested a club deal investment in a €432m development project in Vienna.

It encompasses Vienna's development projects, TRIIIPLE and Danube Flats. TRIIIPLE is located in the heart of the popular third district near the Danube Canal and the Prater. The skyscraper trio will comprise 847 apartments. At a height of 150 metres, Danube Flats will become the tallest residential tower in the German-speaking market. The 463-apartment project is located in the immediate vicinity of the UNO City.

Both projects will offer rental apartments and condominiums as well as office and commercial space. Concierge services, child care facilities, gyms and roof top gardens are part of the site concepts.

‘The exit from the club deal came earlier than expected and resulted in a very attractive return for our investors,’ said Thomas Landschreiber, Corestate’s CIO. ‘These kinds of club deals form the basis of a very successful business model for our family office and UHNWI investors. We will increase our club deal activities.’

Earlier this month, Corestate raised its forecast for 2018 to an adjusted group result of €120m and an overall performance of over €230m. The group increased its overall performance in the first nine months of this year by 111% to €83.4m. Its consolidated net income adjusted for non-recurring effects grew 121% to €26.9m. With profit-sharing recorded in October from two mezzanine loan funds of HFS acquired in the summer, the surplus comes to €62.3m.

In addition, Corestate has brought investment group Hannover Leasing back into the black since the two groups merged six months ago. Hannover Leasing reported €4.6m in profits in the third quarter - for the first time in almost ten years.

Corestate placed senior, unsecured convertible bonds due in 2022 in an aggregate nominal amount of €200m. The company intends to use the net proceeds for the refinancing of existing debt as well as for general corporate purposes.

The bonds are rated BB+ in line with Corestate's long-term corporate credit rating. They were placed with a coupon of 1.375% per annum, payable semi-annually in arrear and the conversion price was set to €61.95, representing a premium of 27.5% above the reference share price.

‘The successful placement of the convertible bond rated by Standard & Poor's underscores our enhanced access to capital markets,’ said Corestate’s CFO, Lars Schnidrig. ‘As envisaged we have further diversified our funding base thereby significantly reducing our cost of capital.’