Big bidder pack chases rare German loans sale by Publity

German fund and asset manager Publity has received 23 indicative bids for a €213m domestic loan book, reflecting the strong appetite for German non-performing property debt. The portfolio is being sold through loan auction platform DebtX.

In the running are two German banks, two German funds, 15 institutional – mostly non-German – funds, three big European banks and one Chinese party.

Such assets rarely come to the market and the strong line-up of bidders shows that “investors haven’t seen any other deals”, said Serge Santos, Publity’s new head of business development, based in London.

So far, non-German banks have been the main vendors in such sales. However, German banks are expected to become more active in their home market off the back of reverse enquiries and “an increasing number of investors looking to get a toe hold in the market”, said Gifford West, DebtX’s head
of international sales.

The secondary trade is Publity’s way of “testing the market”, according to Santos, who joined from Värde in February.

The portfolio comprises six individual loans secured against commercial properties including offices, a retail/apartment building and a market square; plus a sub-portfolio of residential mortgages with a face value of €80m.

German institutions com-prise 80-90% of the original lenders on the loans. Bids have been submitted for both specific assets and the entire book, with final bids due during the first week of April.

The package assembles loans acquired by Publity from various portfolios over time. It has seven German-focused funds for retail investors and wealthy private individuals, four of which are in their investment phase and one is closed.

Publity held a first closing for a new German commercial real estate fund last year at around €27m and is fund raising for another, with a target size of €100m.

The group is seeking to put greater focus on commercial property over residential non- performing loans and intends to bring on board institutional investors, at first through managed accounts.