pbb lends €63m on Cerberus’ German retail assets

pbb Deutsche Pfandbriefbank has provided a €63m senior loan to Cerberus Capital Management to refinance three German retail properties.

The funds will also be used to refurbish the three shopping centres located in Bielefeld, Bonn and Konstanz.

“We are convinced that our partners will succeed in significantly enhancing the quality of the properties through the major refurbishment measures already in hand,” said Gerhard Meitinger, head of real estate finance for Germany at pbb. “This is one of the reasons why we are pleased to support this transaction as a financing partner.”

Cerberus acquired the properties from Wells Fargo in August 2013 as part of its purchase of the nine-asset Project Phoenix portfolio. The US-based investor bought the 92,000 sq m portfolio, valued at €200m in 2007, for €70m, enabling Wells Fargo to remove the non-performing loans associated with the properties from its balance sheet.

Cerberus said at that time that the purchase provided an “opportunity to inject fresh capital and spearhead the turnaround of the properties”. It plans extensive refurbishment works for the three refinanced properties and to raise their occupancy rates.

Cerberus has been an active investor in Germany since 2002. In 2012, it acquired the 300,000 sq m Rebound portfolio of 47 retail and mixed-use properties from FMS Wertmanagement.