Specialist Swiss real estate investors Corestate have announced the sale of a mixed-use German property portfolio to national institutional buyers for €250m, representatives confirmed today.
The company – a Europe-wide entity with offices in Zug, London, Frankfurt, Luxembourg and Essen – initially acquired the portfolio in a mixed state of dilapidation, with most properties requiring modernisation and many needing complete structural overhauls.
Rigorous investment totalling €10m in asset management has helped to reposition the portfolio, which consists of around 3,700 commercial and residential units in Northrhine-Westfalia, Hesse and Berlin – Germany.
The improvements to the overall state of the properties within the portfolio ran like clockwork, according to Corestate Capital’s chief operating officer Thomas Landschreiber. He said: “This has been a very successful transaction through which we fulfilled our business plan as forecasted; decreasing the vacancy and delinquency rates in this portfolio and thereby increasing the cash flow considerably.
“Not only have we improved the quality of the assets and the overall living and usage conditions for the tenants, we have also turned distressed assets into a stable core portfolio, achieving attractive returns for our investors.”
Such returns have ensured that this is far from the final repositioning project to be undertaken by Corestate, with further deals on the German market already in the pipeline.
Landschreiber commented: “The success of our very hands-on approach shows the importance of strong asset management. We intend to build up our platform even more in the near future as we see an increased number of transactions coming to the market.
“Furthermore, we are currently in the process of repositioning more recent acquisitions which are undergoing similar asset management improvements. As a result, we are continuing to create a product which caters to the increased national and international demand for stable German property, characterized by capital preservation and strong, sustainable rental cash flows.”
