Helaba has written a €420m (£301m) cheque to finance Orion Capital Management’s latest European acquisition.
The German bank has financed Orion’s €600m purchase of a portfolio of German offices from Credit Suisse Asset Management’s CS Euroreal fund. The five-year loan reflects a loan-to-value of 70%. A margin of less than 200bps has been agreed.
The 20-asset Odin portfolio includes the 194,000 sq ft Philips headquarters in Hamburg and has a vacancy rate of close to 30%.
German banks have been competing fiercely to maintain market share in their domestic markets where margins have plummeted over the past year. Helaba is understood to have won the mandate ahead of investment banks because of its lower cost of capital accessed through the pfandbrief market.
Helaba has been one of Europe’s most active real estate financiers in the past year, lending €11.8bn to the sector in 2014. Last month it was part of a £400m three-member club that refinanced TIAA Henderson Real Estate’s UK Retail Warehouse Fund.
Orion’s purchase of the Odin portfolio is being made by its €1.3bn Orion European Real Estate Fund IV, which was closed at the end of 2013. The private equity investor has been selling out of investments it made early in the cycle in Spain while still trying to find value in the UK secondary shopping centre market, Italy and Germany.
Credit Suisse was forced to liquidate the then €6bn open-ended CS Euroreal fund in 2012 following a run on redemptions and its subsequent closure. At the end of the first quarter it still owned €3.3bn of net assets.
Only 4.3% or €14.3m remain in the UK following the £70m sale of the Aurora office building in Glasgow to M&G last month. The largest asset it still owns is the Le Befane shopping centre in Rimini, Italy, valued at €244.2m. Some 54.4%, or €1.8bn, of the assets are in Germany.
