German listed property group Patrizia Immobilien, which has specialised in arranging €1 bn-plus consortium transactions in Germany over recent years, has done it again. This time the company has signed an agreement to acquire a €1 bn office property portfolio in the German federal state of Hesse from a subsidiary of Commerz Real.
German listed property group Patrizia Immobilien, which has specialised in arranging €1 bn-plus consortium transactions in Germany over recent years, has done it again. This time the company has signed an agreement to acquire a €1 bn office property portfolio in the German federal state of Hesse from a subsidiary of Commerz Real.
The package, known as Leo I, involves 18 buildings and is fully leased to the state government of Hesse including the finance ministry and Frankfurt police headquarters. It provides a total of 396,000 m2 of commercial space.
Financial details were kept confidential. Closing is expected for the first quarter of 2014.
Patrizia is acquiring the portfolio for a newly established real estate special fund, which is backed by a number of German-speaking insurance companies, savings banks and pension funds with a long-term investment horizon, according to a company spokesperson.
'With this transaction, we are again demonstrating our expertise in large, non-standard real estate transactions. Via our subsidiary, Patrizia Alternative Investments, we are in a position to restructure real estate portfolios, which run into difficulties due to problems with the capital structure,' said CEO Wolfgang Egger. He pointed to the restructuring of the Deikon portfolio from an insolvency administrator as a good example of this strategy.
Leo I was originally bought by Commerz Real back in 2005 in a €1.07 bn sale-and-leaseback deal with the state of Hesse. The acquisition was financed entirely with debt provided by Hypo Real Estate, once one of Germany’s largest commercial property lenders. As a result of the financial crisis, the loan securitised against the asset defaulted later on, and it is currently owned by bad bank FMS Wertmanagement, according to well-informed market sources.
This is the second major deal completed by Patrizia in just a few months. In autumn 2013, Patrizia acquired the Leo II office 36-property strong portfolio in Hesse for €800 mln. Patrizia's largest consortium deals in recent years include the acquisition of the GBW and LBBW residential portfolios.
Egger: 'The expansion of our range of services was very well received by our customers. We are therefore on track towards becoming one of the leading fully integrated real estate investment houses in Europe.'
