Corestate buys EUR 53m distressed high-street package

Swiss private equity firm Corestate has bought a German high-street real estate portfolio from an unnamed vendor with a market value of EUR 53 mln.

The portfolio comprises 20 traditional high-street assets in a number of urban areas across Germany including Aachen, Hamburg, Duisburg and Potsdam. The portfolio was originally acquired by a foreign investor in 2006 and since then vacancy has increased to 30% and net rental income dropped significantly, putting the portfolio and the underlying financing into distress.

The deal included a complex restructuring of debt facilities provided by German and foreign banks. Corestate plans to stabilise cash-flow through active asset management.

'We are very pleased to have successfully completed a further complex cross-border debt restructuring with multiple lenders and a multi-faceted ownership. The key to unlocking the transaction on this occasion was negotiating a major write-off to the subordinate credit financing,' said Phillip Burns, CEO of Corestate.

He added: 'The current market is providing Corestate with a number of opportunities which benefit from our skill set but we believe that this is just the beginning and we will see an even greater flow of attractive opportunities coming to the market in the second half of 2012.'