Fresh plans for renewed possible Corestate IPO
Luxembourg-headquartered property investment manager Corestate Capital is thought to be having another stab at a public flotation, after it felt forced last year to to pull its imminent listing at the last moment, citing unfavourable market conditions.
Last year's aborted flotation was expected to raise at least €100m for the company. A report from news agency Reuters suggests Corestate now plans a more limited issue of shares to existing business partners, possibly including a mere listing without the fanfare of an IPO or a fresh capital raise. The goal is "to build a platform for acquiring fresh capital later if needed", Reuters cites Corestate as saying. Corestate's investors are mainly wealthy family offices and Swiss institutionals.
Just a couple of weeks ago founder and chairman Ralph Winter bought back a 28% stake in Corestate that he had sold to Swiss investor Intershop in autumn 2013, who were declining participation in further capital raisings. Winter now holds 90% of the company's stock. He and fellow founder-owner Thomas Landschreiber had planned to retain only a minority holding following the putative IPO last year, which was being lead-managed by Berenberg and Bankhause Lampe.
Corestate has completed transactions worth nearly €5.7bn since its foundation in 2006. Originally focusing on opportunistic German residential, the company's main focus now is high street retail in medium-sized German cities, along with specialist sectors such as student housing and micro-apartments.
With apartment holdings now in nine university cities across Germany and Austria, Corestate plans €200m investment to develop a further 1,200 units over the coming 18 months, with a focus on Frankfurt, Berlin, Munich and Vienna.
In retail, Corestate is putting together a €1.5bn retail portfolio over the next two to three years, to capitalise on the high liquidity driving demand for exposure to German retail, said CEO Sascha Wilhelm in a recent interview. “The competition for first-class properties, which has been ongoing for years, will become more intense with the risk of potential overheating. Therefore, investors need to look at German B and C cities and they're really starting to do this", he said.
Corestate recently teamed up with Sistema Capital Partners, the private equity real estate business backed by Russian billionaire Vladimir Yevtushenkov, to invest €125m in four German high-street retail properties. The four properties, on main pedestrianised shopping streets in greater Hamburg, Bremerhaven, Paderborn and Halle, total 60,000sqm. Tenants include H&M, Saturn and Esprit, and the occupancy rate is 94%. More than 60% of the investment is debt-funded.