CORESTATE Bank advised on the successful execution of the acquisition financing for a buy and hold portfolio of 10 project developments.

Aggregate Holdings S.A. has completed the acquisition of a portfolio of ten projects, which consists of five projects in Berlin, four projects in Düsseldorf and one project in Frankfurt. The portfolio’s focus is largely mixed-use urban developments incorporating office (53%), residential (32%), plus commercial, retail and other (15%). Aggregate plans to construct the majority of the Berlin assets as yielding properties in its Build & Hold division and to progress development and then exit the other assets in the portfolio over time. The acquired portfolio’s gross development value (“GDV”) stands at approximately EUR 4.5 billion, with GDV of over EUR 2.5 billion to be retained in Build & Hold.

The combined gross construction area (“GCA”) of the portfolio is c. 1,200,000 sqm across the ten mixed-use developments. The development projects have well advanced planning and building permit applications, with one project having already received a building permit, and five more projects on course to receive building permission in 2021 or early 2022. The remaining projects benefit from zoning plans or project-related local development plans. The residual value of the portfolio as at 31 December 2020 was EUR 1.3 billion on a 100% basis, resulting in a Loan-to-Value for the portfolio post-acquisition of around 50%. The Company has acquired an approximately 85% interest in the projects.

The key Berlin projects are located close to Berlin Brandenburg airport and in the south-east residential area of Treptow-Köpenick. Planned construction for the Berlin-based projects will commence in 2022, with first rental income expected in 2024, following pre-letting in parallel with construction. The retained Berlin assets will be a significant addition to the Build & Hold division, with an expected increase of c. EUR 100 million of net rental income run-rate from the end 2025 onwards, on the basis of a combined additional GCA of approximately 675,000 sqm. The acquisition of the portfolio at a material discount to residual value will result in a significant appreciation in the net asset value of Aggregate group.

Benjamin Lee, Chief Financial Officer and John Nacos, Chief Investment Officer at Aggregate Holdings, said: “This was a great opportunity to acquire high quality, well located real estate assets in Berlin, Düsseldorf and Frankfurt. The entire portfolio was acquired at an attractive price, again demonstrating Aggregate’s ability to undertake complex off-market transactions and deliver well-priced yield-to-cost assets. Post completion of Aggregate’s increased Build & Hold portfolio, the combined rental income from the division is targeted to be c. EUR 225 million.”

CORESTATE Bank advised Aggregate Holdings S.A. in relation to the structuring and placement of the financing.

CORESTATE Bank advised on the successful execution of the acquisition financing for a buy and hold portfolio of 10 project developments.

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