German CMBS maturities to almost double to EUR 14b next year

German CMBS maturities are set to almost double to EUR 14 bn next year, up from EUR 8 bn this year, Dirk Richolt, head of real estate finance at CBRE in Germany, told PropertyEU. This is likely to spark an increase in property sales out of CMBS portfolios, he added.

Last week, Benson Elliot Capital Management, the UK-based private equity real estate fund manager, announced it had exchanged contracts with a number of subsidiaries of Speymill Deutsche Immobilien Company (SDIC), to acquire the Tor residential portfolio. The transaction, which involves the acquisition out of receivership of over 3,000 residential units and ancillary commercial units, in 80 properties in Germany, represents one of the first enforced sales of a defaulted CMBS loan in Germany.

At the time, Benson Elliot said the deal marked the beginning of a long, slow unwind of a period in which property portfolios were hurriedly assembled and aggressively financed and that it would certainly not be the last.

The looming wall of CMBS loan maturity is due to restructurings and previous maturities being added to next year's total, Richolt said. Germany’s multi-family real estate sector is dominating the market, with almost EUR 11 bn in loans expected to mature in the next 18 months, according to analysts. These include the EUR 4.52 bn Grand portfolio, a six-tranche CMBS brought to market by Barclays Bank and Citigroup in August 2006. The portfolio comprises almost 165,000 residential units, as well as 1,000 small commercial properties, garages and car parks in Germany.

Opera Germany (No. 2), a German EUR 558 mln single-loan CMBS transaction backed by four German shopping centers, is also due to mature in October next year.

In addition, the German insolvency law, which was amended on 1 March to make it more creditor-friendly, is also a boost to the market. 'It is helpful, both for loan servicers and for foreigners who are new to the market. It’s beneficial as it enables you to select your own insolvency administrator and takes away some of the uncertainty for lenders wishing to enforce efficiently. The process is becoming more straightforward,' Richolt said.

Germany is the second biggest CMBS market in Europe behind the UK, with around EUR 40 bn in loans that have been securitized.