Developer Aurelis, pre-IPO, secures €530m refinancing

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The German asset manager and developer Aurelis Real Estate has secured a new syndicated loan of €530 with pbb Deutsche Pfandbriefbank and an additional unnamed lender. €430m came from pbb Deutsche Pfandbriefbank which itself acted as lead arranger and agent for the transaction. Aurelis is 93% owned by New York-based investment group Grove International, and is in the process of readying itself for a public market flotation.

The Eschborn-based Aurelis is taking advantage of the favourable interest rate and financing climate to pre-empt a refinancing of debt obligations due in December 2016. The group, formerly part of Deutsche Bahn and holding large urban landbanks as part of its railway legacy, earned €358.2m from the sale of new developments in 2013, while generating rental income of €70.2m through its portfolio of commercial properties, which amounted to a combined 11m sqm across Germany’s larges cities.

CEO Joachim Wieland commented on the new loan, “This refinancing provides Aurelis with additional entrepreneurial and financial flexibility for acquisitions and investments into its rental and development portfolio.” The loan has a number of staggered repayment deadlines of between three and seven years, with the bulk falling due in 2022. The Munich-based pbb has been a long-term banker to Aurelis.

The planned IPO should be worth about €500m, valuing the group at over €1bn and providing a part-exit for Grove, which last year bought out the 50% stake in the company owned by construction group Hochtief. The two had paid €1.6bn in 2007 for Aurelis from legacy owner Deutsche Bahn, but have since shrunk the company’s portfolio significantly.

With this latest sizeable loan, Pbb Deutsche Pfandbrief is following in the footsteps of fellow property lender Aareal, who also recently made a big loan of €530m in senior financing, to US REIT NorthStar Realty Finance for a €1.1bn office portfolio from SEB Asset Management.