Corestate Capital acquires 4,700 apartments in Germany

Swiss real estate private equity firm Corestate Capital has entered into an agreement to acquire around 4,700 apartments from BGP Investment in Germany. The portfolio comprises over 300,000 m² of lettable space in the west of the country and currently carries about EUR 150 mln of debt financing.

Under the terms of the proposed transaction, a holding company of Corestate will assume ownership of the portfolio from BGP and implement a comprehensive investment and capital expenditure programme. The transaction remains subject to approval by various parties, including the lenders. Consent from the financiers has to be obtained by the end of February 2010 for the transaction to complete successfully.

Ralph Winter, founder of Corestate stated: 'We plan to add these 4,700 apartments to Corestate's extensive base of residential properties, for which we have already achieved significant improvements. We are now looking forward to bringing the former BGP estate forward with our expert asset management team.'

BGP Investments is a Luxembourg-based private company that was originally the investment vehicle of the joint venture between Australian companies Babcock & Brown Ltd and the GPT Group. It has recently been spun off by GPT to its shareholders.

BGP and its affiliates hold ownership interests in a residential portfolio of 30,000 flats (and 996 smaller commercial units; total lettable area: 1.9 million m2), an industrial portfolio with 107 properties and 1.65 million m² of gross lettable area and an estate of 52 retail properties with 360,000 m² of gross lettable area. BGP aims to sell its holdings over the next few years and return any net income or capital to its investors.