Versorgungsanstalt des Bundes und der Länder (VBL), the largest shareholder in Deutsche Konsum Real Estate, is banking on the long-term appreciation of the listed retail property firm’s portfolio, following a restructuring.
The €70bn German pension fund public sector supplementary pension fund said it is backing Deutsche Konsum Real Estate’s further development “constructively and transparently”.
VBL now holds a controlling stake of over 60% in Deutsche Konsum Real Estate after completing a capital raise and €120m debt-to-equity conversion.
The pension fund covered €108m liabilities, while the holders of the convertible bonds contributed with €10m.
By increasing the equity share in Deutsche Konsum, VBL facilitates a “comprehensive balance sheet restructuring and simultaneously a financial restart” of the company, the pension fund said.
VBL’s capital increase, approved in December last year, is part of a restructuring plan kicked off to safeguard Deutsche Konsum’s long-term financial stability.
Deutsche Konsum expects to divest up to €300m in assets by September 2028 to address €465.6m in total financial liabilities, including bank loans and bonds, as part of a restructuring plan to stabilise its capital structure.
The name Deutsche Konsum Real Estate was adopted to replace the former Deutsche Konsum REIT designation after the firm’s equity ratio fell below the required 45% for a third consecutive year, resulting in the loss of its real estate investment trust tax-exempt status.
Execution risks
Philipp Wass, managing director at Scope Ratings, told IPE Real Assets that, from a credit perspective, the debt‑to‑equity swap reduced gross debt by around €120m, materially lowering leverage and improving short‑term liquidity.
The swap reduced annual interest payments by about €7m, supporting interest cover and cash flow, helping to remove imminent refinancing pressure and freeing time to execute the restructuring plan, he added.
“VBL’s majority ownership is expected to improve Deutsche Konsum’s banking relationships and market standing, helping to mitigate refinancing risk,” said Wass.
However, the execution of the restructuring plan depends primarily on Deutsche Konsum’s ability to sell up to €300m assets.
“Market conditions for non‑core retail properties may slow progress,” he said.
According to its fiscal first-quarter 2026 results, Deutsche Konsum’s assets were valued at €775m as of the end of 2025, down from €886m in 2024 and nearly €1bn in 2023.
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