FINANCE: Summit Germany has regained full control of an 11-strong portfolio after agreeing a discounted loan buyout.
The German commercial real estate company, which was founded in 2006 and listed on AIM in February this year, paid €45.5m (£37.6m) for the loan facility, which has a face value of €74m.
Final completion is intended to take place in the next few days after a binding agreement was signed on 7 April 7.
The portfolio consists of 11 properties, comprised mainly of offices in Germany with an aggregate net lettable area of around 1m sq ft and an occupancy rate of 71%.
It generates an aggregate net annual rent of around €6.3m, reflecting a gross rental yield of 13.7% on the acquisition cost.
In addition, a Summit subsidiary has sold its 50% stake in a joint venture owning a single property in Berlin.
The disposal is part of the company’s ongoing strategy of actively managing its portfolio to maximise returns.
The property was valued at €5.1m at sale and had outstanding debt of circa €3m and an implied net yield of 5.2%. The subsidiary’s net proceeds from the sale are circa €1.1m, a €600,000 gain.
Managing partner Zohar Levy said: “We are delighted to have concluded the acquisition of the loan, which brings into the group a portfolio of properties with attractive cash flows and upside potential.
“We know the properties well and are confident of our ability to enhance their value over time.
“In parallel, we continue to strengthen our portfolio by selling properties that have realised their full potential while acquiring new properties with considerable upside.”
Non-executive director Harry Hyman said: “I am extremely pleased that Summit has been able to deploy the proceeds raised at the time of its admission to AIM through this acquisition.
“I believe this will create substantial value for shareholders. We have a number of attractive opportunities which we continue to evaluate and which leverage the skills of the team in identifying and enhancing value from distressed portfolios.”
bridget.oconnell@estatesgazette.com
