Corestate Group has acquired a portfolio of 3,000 apartments in Berlin and an office building in Stuttgart for a total of EUR 230 mln. The Swiss private equity real estate investor said the transaction involved a complicated debt structure with multiple lenders.

The vendor was a foreign investor who had purchased the assets at the peak of the German real estate market. The Stuttgart asset was acquired at a 7.4% yield and is let on a long lease to the State of Baden Württemberg.

Corestate plans to invest additional capital across the portfolio in order to refurbish and upgrade the properties.

Phillip Burns, CEO of Corestate, said: 'The complexity of this transaction is characteristic of the challenges facing German/European real estate markets in particular for the banks. The restructuring of debt, dealing with the sensitivities and priorities of multiple lenders is highly complicated and something that we expect to see replicated in an increasing number of stressed situations over the next couple of years.'

Corestate is based in Zug, Switzerland, with partner offices in Frankfurt, London and Luxembourg. Founded in early 2006 by Ralph Winter, the business has invested EUR 2 bn in the German real estate market both through direct and indirect transactions. The company also holds a majority interest in Youniq, a Frankfurt-based developer of student accommodation.