Credit Suisse Group AG (CSGN) is selling commercial buildings in Germany valued at about 700 million euros ($950 million) as it liquidates property mutual funds in the country, two people with knowledge of the matter said.
Brookfield Financial (BAM:US) is managing the sale, said the people, who asked not to be identified because the matter is private. Some of the 20 properties being sold are held by Credit Suisse’s CS Euroreal fund and include the German headquarters of Royal Philips NV (PHIA) in Hamburg, one of the people said.
A spokeswoman at Zurich-based Credit Suisse and a spokesman at Brookfield Financial, a unit of Toronto-based Brookfield Asset Management Inc., declined to comment.
German property funds began winding down more than 25 billion euros of assets in 2010 after investors, shaken by the global financial crisis, sought more redemptions than funds could immediately meet. More than 13 of the 44 funds have suspended redemptions or are liquidating, said Sonja Knorr, an analyst at Berlin-based Scope Ratings.
The CS Euroreal fund has properties valued at about 4.3 billion euros, according to Credit Suisse’s website. The fund had 6 billion euros of assets when it began liquidating in 2012.
Credit Suisse has until April 30, 2017, to liquidate CS Euroreal, according to German regulators.
In December, Credit Suisse agreed to sell six properties, including the Corn Exchange office building in London, for 315.3 million euros. That was 6.5 percent less than the previously assessed value.
Insurers, pension funds and sovereign wealth funds are buying German commercial property as a way to boost returns at a time when other fixed-income assets are paying low interest rates. Investors will probably buy offices, shops and warehouses valued at as much as 40 billion euros in 2014, according to a forecast by Jones Lang LaSalle Inc. (JLL:US) That would be 30 percent more than in 2013.
To contact the reporter on this story: Dalia Fahmy in Berlin at email@example.com
To contact the editor responsible for this story: Andrew Blackman at firstname.lastname@example.org Andrew Blackman, Jeffrey St.Onge