The German Real Estate Fund has shed over 15% of its Net Asset Value in the past months, bringing the total NAV decline since the start of the financial crisis to over 50%.
The German Real Estate Fund has shed over 15% of its Net Asset Value in the past months, bringing the total NAV decline since the start of the financial crisis to over 50%.
Launched in 2006, the Cayman Islands-domiciled fund is managed by London & Capital and invests in German commercial real estate assets. Since January 2008, it has seen its Net Asset Value decline from €1.1 bn to €546 mln at end December 2012, raising concerns among its backers about the possibility to recover their investment.
The fund's Net Asset Value was €657 mln in October 2012, when it completed the sale of a large chunk of its portfolio. It is believed that the buyer was Catalyst Capital. In October last year, the London-based the private equity firm announced that it had acquired a portfolio of 32 retail properties in Germany on behalf of the Catalyst European Property Fund (CEPF) from an unnamed vendor.
According to well-informed market sources, Catalyst Capital acquired the assets from the German Real Estate fund for €154 mln, marking a discount of 12% on the assets’ latest valuation.
According to documents obtained by PropertyEU, the German Real Estate Fund has been closed to redemptions since February 2008, when trading was suspended ‘as a protective measure for shareholders’.
The vehicle owns a portfolio of 44 German retail, office and warehouse properties valued at €459 mln against debt of €334 mln, reflecting a loan to value of 73%. The package is nearly fully let with an average lease length of 7.3 years and a running yield of 7.4%.
Almost 85% of the assets are located in former West Germany, with a large proportion in Bavaria and Baden-Württemberg.
London & Capital declined to comment.
