Nationwide close to completing €650m German NPL deal

British building society Nationwide is reported to be selling its complete German loan book with a nominal value of about €850m. This would not be the first time Nationwide have tried to find a buyer as they seek again to exit the German market, after trying to unload the portfolio in 2013.

The Project Adelaide portfolio includes about 200 widely diverse commercial property assets, and the most serious bidders still in contention for the loan book are private equity groups Cerberus, Oaktree and Kildare.

According to CoStar Finance, the assets include a broad mix of commercial properties all bought before 2008 at a time when Nationwide had ambitious plans for expansion in Germany. These include offices, business parks, logistics properties, discount grocers, supermarkets, several DIY stores of now-insolvent Praktiker, specialist stores and neighbourhood malls, including several large big-box stores in eastern Germany.

The individual loans range in size from €20m to €30m, with consultants Deloitte, mandated to handle the sale by Nationwide, putting a value on the underlying property assets at upwards of €650m. The three bidders are thought to have each bid at least €600m.

Among the largest assets by rental income is Pösnapark in Grosspösna near Leipzig, which produces a rent roll of €4.4m. The centre was built in 1993 and has retailer Kaufland as its anchor tenant. At one point the centre had 40% vacancy, but this has been reduced to 13% since the centre management was taken over in 2010 by CEV, a subsidiary of retailer Edeka.

The portfolio also includes a mish-mash of one-off assets, such as a light industrial factory in Memmingen leased out until 2029 to a car parts manufacturer, a cinema complex in Marburg, and diverse logistics and office properties with remaining lease lengths of as low as three years.