Pfandbrief banks fund €190.5m of deals by Tristan

Tristan Capital Partners has financed its €190.5m purchases of three shopping centres in Austria and Germany, plus a Berlin office, with cheap debt from German pfandbrief banks. Tristan bought Shopping Centre Nord in the Floridsdorf district of Vienna for €75m, and Walle-Centre in Bremen for €32m, on behalf of its EPISO3 opportunity fund, in deals financed by pbb Deutsche Pfandbriefbank and Bremer Landesbank respectively.

For its core plus CCPIII fund, the pan-European property investment manager acquired a mall in Witten for about €45m. This was also financed by pbb, although the assets the bank funded were initially bought using cash. In April, Tristan acquired two Berlin offices from the Cornerstone Titan Europe CMBS for a total of €45m. Debt on the larger office, the Jannowitz Center in Berlin Mitte, for which it paid €38.5m, came from Degi Hyp.

EPISO3 sold the second Berlin office, the Die Welle building in the Lichtenberg district, for €4.5m in December, reflecting a 35% gross profit on the purchase price. All of the loans represented a 60-65% loan-to-cost ratio over five years. Ali Otmar, Tristan Capital Partners’ managing director of investments, said: “Leverage is probably cheapest in Germany among all the European markets in which we invest.”

The average margin for these value-added properties was around 180-185 basis points. The shopping centre in Witten, north-west Germany commanded slightly less, as it is a core-plus asset that is already fully leased. Debt for the Vienna mall cost slightly more and has €13m-15m allocated for refurbishment.