Benson Elliot sells German resi assets to LEG

Benson Elliot, the UK-based private equity real estate fund manager, has announced the sale of 700 units from its German residential portfolio to German listed investor LEG Immobilien.

The total consideration for the transaction represents a rental yield of 6.8%.

The properties sold to LEG are all located in North-Rhine Westphalia. They constitute part of the Tor portfolio, which originally encompassed more than 3,000 residential and ancillary commercial units across Germany.

The portfolio, which secured a €187 mln loan, was acquired by Benson Elliot out of an Isle-of-Man receivership in 2012. That process was directed by special servicer Hatfield Philips International and receiver Ernst & Young, in conjunction with the borrower.

Benson Elliot’s purchase of the Tor portfolio represented one of the first defaulted CMBS portfolio loans to be resolved in the aftermath of the global financial crisis.

Since acquisition, Benson Elliot and joint venture partner Wertgrund Immobilien have undertaken a number of asset management initiatives including the implementation of a capex programme, raising the occupancy rate across the portfolio from 90% to 97%.

With this latest sale Benson Elliot said it has realised well over €200 mln of disposal proceeds from the Tor investment, exiting 69 of the original 80 assets and distributing investors above 150% of invested capital.

'We have seen strong income and capital growth across the Tor portfolio since we acquired it some three years ago,' said Georg Strassner, principal and co-head of Germany at Benson Elliot. 'We were confident at the time of purchase that quality residential assets like these – once stabilised – would prove attractive to buyers seeking reliable income in a low interest rate environment. We’ll look to wind down the remaining assets in the near term, crystallising the remaining value.'