Helaba has backed Patron Capital’s purchase of an office block in Berlin with an acquisition and speculative redevelopment loan believed to total €60m-€75m.
The five-year loan reflects an LTV between 70% and 75% with an interest rate sub-200bps.
The total value of the scheme in Berlin’s Charlottenburg district, including acquisition and redevelopment, is thought to be around €80m-€100m when complete.
The private equity firm usually uses very low leverage on deals made by its Patron Capital LP IV fund, which bought the Berlin site from GE Real Estate.
“Buying in Germany 100% equity, without any debt on it, it will be very tough to get our return,” said Christoph Ignaczak, investment director at Patron.
“When buying something on equity we bet on it and either it works or not and if it works, great, and I get a multiple on my equity with the returns. But if investing without this binary gain, which is very risky, you always need some kind of debt.”
The private equity firm will redevelop the property — comprised of three vacant, adjoining buildings totaling 550,000 sq ft on Franklinstrasse and Salzufer — into large floor-plate offices with development partner Suprema. The building was formerly let to the Technical University of Berlin.
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