Orion seals €600m German office deal with financing from Helaba

European private equity firm Orion Capital Partners has sealed the much-anticipated €600 mln acquisition of the Odin office portfolio in Germany, with German lender Helaba providing €347 mln in financing for just over half of the assets.

As reported by PropertyEU in April, Orion is buying the 20-asset portfolio from funds managed by Credit Suisse Asset Management.

In a statement Helaba said the financed portfolio consists of 11 properties spread over six German cities with a concentration in Hamburg and Berlin comprising 178,000 m2 of lettable space, of which 81% is currently let. The top 10 tenants with strong covenants - such as the Federal Institute for Real Estate Issues, Philips, or Reemtsma - account for 72% of the rental income and 57% of the lettable area.

The details of the financing were not disclosed, but it is believed it is a five-year facility with a margin of less than 200 basis points above Euribor.

Aref Lahham, managing director and a founding partner of Orion, said: 'Orion assessed the quality of the portfolio to be superior compared to other German office portfolios that are currently being marketed. Many of the assets are located in the big seven cities and the portfolio is anchored by strong credit tenants. Orion’s business plan is to drive rental income by investing in the premises in order to increase occupancy levels and further institutionalise the assets.'

This is the first time Helaba has financed a transaction for Orion and the bank indicated it hoped to continue the relationship. Jürgen Fenk, Helaba board member responsible for real estate, added: 'Financing the Odin portfolio is also significant proof of our capability to handle big tickets. And we aim to reach out for comparable transactions in the future.'

It is understood Credit Suisse sold the Odin assets as part of the liquidation of its open-ended funds, the €3.2 bn CS Euroreal and the smaller CS Property Dynamic. The portfolio was put on the market last summer through Brookfield Financial and consists of around 20 buildings, largely for office use. It is believed to include the German headquarters of electronics group Philips in Hamburg.

Credit Suisse has until 30 April 2017 to liquidate CS Euroreal. The fund's German portfolio mainly includes office properties in Berlin, Frankfurt and Hamburg.