The German Real Estate Fund, a vehicle managed by private advisory firm London & Capital, was the vendor of a portfolio of 30 German retail assets bought by Catalyst Capital in late 2012, PropertyEU has learned.
The German Real Estate Fund, a vehicle managed by private advisory firm London & Capital, was the vendor of a portfolio of 30 German retail assets bought by Catalyst Capital in late 2012, PropertyEU has learned.
Catalyst, the private equity firm, said in October last year that it had acquired a portfolio of 32 retail properties in Germany with 70% leverage on behalf of the Catalyst European Property Fund (CEPF) from an unnamed vendor.
According to well-informed market sources, the 125,000 m2 package was acquired from the German Real Estate fund for €154 mln. PropertyEU understands that the price reflected a discount of 12% on the assets’ latest valuation of €175 mln carried out by Colliers International.
The German Real Estate Fund was launched in 2006 and invests in German commercial real estate assets. In the past five years, it has seen its Net Asset Value halve from €1.1 bn in January 2008 to €546 mln at end December 2012, raising concerns among its backers about the possibility to recover their investment. The fund now has assets valued at €460 mln.
The transaction with Catalyst, representing around 33% of the fund's gross value, was structured as a share deal where the buyer acquired the special purpose vehicle companies (SPVs). The sale resulted in the distribution of just 7-8% of the equity to the fund’s shareholders, after repayment of debt.
Catalyst Capital secured a €85 mln debt facility from German financier pbb Deutsche Pfandbriefbank to finance the acquisition, while Austrian bank Bawag provided an additional €21.5 mln in stretched senior debt.
The portfolio comprises retail warehouses, supermarkets, discount outlets, plus individual DIY and hypermarkets located in Bavaria, Baden-Württemberg and North Rhine-Westphalia. The main tenants include German retail chains Edeka, REWE, Real, OBI and Hornbach.
Catalyst Capital and London & Capital declined to comment.
Catalyst Capital was advised by Jones Lang LaSalle and REAG. James Andrew International, London, and Kintyre Investments, Frankfurt, acted as intermediary advisors. Eversheds, in London and Munich, and Frankfurt-based FPS Fritze Wicke Seelig acted as legal advisors to Catalyst Capital. The vendors were advised by Clifford Chance.
