Corestate sells 5,000-unit NRW portfolio to GAGFAH

Swiss real estate investor Corestate Capital said it had sold a German residential property portfolio to German listed residential firm Gagfah, for an undisclosed price.

The portfolio includes around 4,960 residential units spread across several major cities in North Rhine-Westphalia. Gagfah commented that the portfolio deal represented "a first step in the recently announced growth strategy of our firm."

"Our specialised asset management team began to take the necessary steps to reposition and stabilise the portfolio as soon as we had acquired it," commented Thomas Landschreiber, CIO of Zug-based Corestate. "Committing a pinpoint cashflow, we refurbished parts of the portfolio, decreased vacancy rates, enforced market-consistent rent increases, and thereby created an increase in value and value retention of the properties."

The deal follows Corestate's disposal over the summer of a portfolio of 8,200 German residential units to Frankfurt-listed Adler Real Estate. The portfolio comprised over 7,700 residential and 490 commercial units spread across Germany, with a focus on the federal states of Saxony, Saxony-Anhalt and North Rhine-Westphalia.

Headquartered in Zug, Switzerland, Corestate specialises in turning around under-performing residential property portfolios in Germany. The management-owned company acts as an investor and asset manager, generally co-investing alongside its principal investors with an own equity interest of up ot 50%.

Founder and CEO Ralph Winter said recently that in its club deals with investors Corestate had achieved an average equity yield rate of 29% per annum and a return on the invested equity of 1.7 time, with an average investment period of less than 36 months. Many of the more successful deals involved under-managed residential portfolios well outside the largest cities and them stabilising them, managing them, and then selling them as stabilised portfolios suitable for new investors looking for lower targeted returns.