Duet Private Equity’s European Real Estate Debt Fund has completed a €14.5m mezzanine financing deal secured by a portfolio of eight hotels in Germany owned by Blackstone.
The hotels are held in the Blackstone Real Estate Partners (BREP) International Fund II and BREP Fund V and were previously financed by Citibank. They include the five-star Grand Esplanade in Berlin.
A total of €74m of new debt has been put in place with the senior debt provided by Deutsche Bank’s London office. It is thought that the overall loan-to-value ratio of the new debt, including the mezzanine tranche, is under 60%.
Duet has now invested 60% of the initial €100m it raised for the fund a year ago. It has made five investments, one of which, a holding of CMBS bonds in a UK deal, has been sold.
The other investments are a mezzanine financing of a Nordic retail asset; the refinancing of the Columbus Courtyard office building let to Credit Canary Wharf; and a securitisation backed by UK healthcare tenants. Duet is looking to raise €100m in an initial public offering as a feeder-fund for the debt fund.