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Commerzbank AG
Three of the funds accounted for more than half, or €4.3 billion, of the total investment volume in 2018: Commerzbank’s hausInvest was the most active fund, investing €1.8 billion.
Commerzbank is wasting little time in implementing its strategy to divest itself of poorly-performing or low margin businesses, shedding staff, and refocusing on private clients and ‘mittelstand’ companies.
The radical slimming diet includes dumping much of the legacy real estate business it inherited with its ill-fated venture into global real estate financing with Eurohypo. The bank has been actively negotiating with interested parties looking to pick up the remnants of Eurohypo’s loan book at the right price, and we do expect new loan book sales to be announced shortly.
But this time the bank is selling its real estate Spezialfonds business Commerz Real Spezialfondsgesellschaft mbH (CRS), and the buyer is British fund group Internos, which established its own German Spezialfonds platform in mid-2012. CRS manages a portfolio of nine separate funds, holding real estate valued at €1.6bn, including 68 European office, retail, hotel and logistics properties.
Essentially the division is the complete institutional (rather than the retail) real estate business of Commerz Real, although Commerz Real will continue to manage institutional investment vehicles in the infrastructure sector, such as electricity grid operator Amprion, which it bought in 2011 from utility RWE. The bank said this would play to its strengths in the area of club deals and asset management.
Commerzbank said the real estate Spezialfonds division was low-margin and barely profitable. Just a couple of months ago Commerz Real boss Andreas Muschter bemoaned the “lack of efficiency” in the bank’s Spezialfonds division, while at the same time announcing the launch of two further European-based Spezialfonds.
Commerz Real, a fully-owned subsidiary of Commerzbank, has €35bn of assets under management and manages several German open-ended property funds. These include the biggest open-ended fund in Germany, Commerz Real HausInvest, which, among other assets, controls French REIT/SIIC Cegereal. It also has equity investments in aircraft, renewable energy, and shipping.
Jos Short, the CEO and co-founder of Internos, was in Frankfurt last week at a real estate gathering attended by REFIRE, and talked about his expansion plans for the company’s German platform, although there were no specific details about the terms or the price of the Commerz Real deal. However, the bulk of Internos’s €1.9bn assets under management are in Germany, so there should be a certain natural fit. Internos’s German platform is headed by Paul Muno, himself a former MD of Commerz Real Spezialfonds.
Commerzbank is gearing up to cut 5,200 jobs by the end of 2016, including 1,400 at its Frankfurt headquarters. This is likely to mean several Commerzbank properties in the Rhine-Main area around Frankfurt coming on the market. Excluded from this will be the Lateral Towers in Hausen in Frankfurt, previous home of stock exchange operator Deutsche Börse, and the Gallileo high-rise in Frankurt’s central business district, which was sold to an IVG Immobilien group of South Korean fund investors earlier this month. Helping to boost its price prior to the sale was the signature by Commerzbank itself for a ten-year lease on 40,000 sqm of floor space.
