German mortgage bank Berlin Hyp has written a €510 million loan to refinance a commercial real estate portfolio of multifunctional rental spaces in Berlin.
The seven-year loan, with a margin below 1 percent per year, has been provided to GSG Gewerbesiedlungs-Gesellschaft, owned by Luxembourg-based real estate firm CPI Property Group.
The loan refinances a debt package provided by a syndicate of banks and another lender. It will also provide CPI with more than €200 million of available funds, which the company intends to invest in Berlin and use for further growth.
The portfolio is one of the core assets of CPI. It includes 41 commercial properties in Berlin with a rental area of 770,000 square meters and 5,600 parking spaces. The properties can be used as office, warehouse or production facilities.
Most of the portfolio’s properties are in Berlin’s Kreuzberg district, with additional assets in the western part of the city as well as in the eastern Berlin districts of Marzahn, Pankow and Hohenschönhausen.
The spaces are rented to small- and medium-sized workshops and commercial enterprises, as well as to start-ups. The largest tenants include Technische Universität Berlin, the radio station Deutsche Welle, Fraunhofer Gesellschaft and the co-working space provider Ahoy Berlin.
“The project concerns a highly complex, individual financing transaction for a professional customer that we were able to provide in line with the customer’s wishes and the stipulated requirements in just four months,” said Gero Bergmann, member of Berlin Hyp’s board of management.
Berlin Hyp reported a new lending volume of €3.1 billion in the first half of 2017, which represents a 6.89 percent increase year-on-year.
“The commercial real estate market is particularly challenging, with fierce competition, a limited core segment and real estate financers’ margins under pressure,” the bank said.
However, the ongoing low-interest environment is boosting transaction volumes, the bank said, while a lack of viable alternative investment options is pushing German investors and, increasingly, international investors into the German market.