CR Investment Management selling two German portfolios

The London and Berlin-based CR Investment Management said earlier this month it had been mandated to sell two German real estate portfolios made up of 20 different assets.

The first portfolio, to be handled by CR’s Transaction Advisory Group, is made up of 12 Deutsche Telekom real estate assets totalling 153,000 sqm, located across Germany, with nine of the properties larger than 10,000 sqm, and mainly in secondary locations.

According to CoStar Finance, the portfolio is the collateral for the DT12 loan, part of the legacy €739m Talisman 4 Finance CMBS issued by ABN Amro in 2006. The assets have been in special servicing with Hatfield Philips International (HPI), having been acquired in a sale-and-leaseback deal by listed Israeli investor Summit Real Estate Holdings in 2006 for about €220m, with ABN Amro providing a €176m senior loan.

CR said it was approaching about 400 potential investors and developers to submit bids for the whole or part of the portfolio, stressing that the buyers will need to be capable of carrying out large developments and refurbishments. This would appear consistent with the most recent valuation of the portfolio at €90.7m in February of this year, itself down a third on twelve months previously, as the remaining lease terms on the portfolio fell to 3.3 years on average.

A presentation by HPI at the end of March showed that several of the major assets in the portfolio, including those in Mannheim, Magdeburg, Düsseldorf and Nuremberg had had their leases terminated. The €90.7m valuation in February stood in contrast to an unpaid balance of €163m, giving the portfolio a current loan-to-value ratio of €179.68%.

The second portfolio, which CR has been appointed to both asset manage and sell, consists of 8 mainly retail assets, covering 39,000 sqm of fully-leased lettable space predominantly in north-west Germany. The lender, Royal Bank of Scotland, is enforcing a legacy defaulted loan on the portfolio, which is currently valued at €25m and which generates a rent roll of about €3m annually. Investors can bid on all of the portfolio, tow sub-portfolios or for single assets.