Corestate acquires Berlin apartments for EUR 160m

Swiss investment group Corestate has acquired a residential and commercial real estate portfolio which formed part of a CMBS vehicle.

The investment volume for the 40 properties, including 2,000 apartments, comes to EUR 160 mln. The portfolio offers slightly lower than market rental levels and assets are mostly located in sought-after micro-locations in the city of Berlin.

The portfolio also includes a EUR 35 mln project development in the city centre. Corestate Group said it plans significant capital expenditure to further improve the quality and profitability of the assets in the next few years.

The properties had all been acquired by a foreign investor during the peak cycle of the German real estate market. The existing bank financing with attractive terms will be assumed. It is part of a securitised loan conduit.

This is the fourth transaction Corestate has carried out in 2010 for which the firm, together with the lenders, will implement a new business plan including capital expenditure.

'The complex assumption of securitized CMBS debt is an extreme challenge for all parties involved and offers a good preview for the upcoming years,' said Corestate founder Ralph Winter.