M7 Real Estate has secured a €31 million senior loan from Berlin Hyp to finance a portfolio of German retail assets.
The circa 66 percent loan-to-value facility was provided by the German bank to finance the latest purchase by M7’s first European vehicle, European Real Estate Investment Partners I (M7 EREIP I). The fund bought the 33,821 square metres portfolio from an unidentified vendor in October.
The portfolio comprises a total of eight properties located in Brunswick, Hanover and other cities in Lower Saxony and North Rhine-Westphalia. The €47 million purchase price reflected an initial yield of 8.5 percent. The portfolio has a vacancy rate of 7 percent.
M7 said that it has around 20 additional retail assets under offer for the M7 EREIP I fund, which are expected to close in early 2016. The firm is in negotiations with Berlin Hyp about financing the acquisitions.
M7 EREIP I is a discretionary fund set up for high net worth investors. The fund is invested exclusively in the German convenience retail sector.
M7, which is led by chief executive Richard Croft, is actively investing across several European countries. The firm recently established a joint venture with Mount Street Loan Solutions to act as co-investor an operating partner in European non-performing loan deals.