Corestate sells stake to Intershop

The Zug-based private equity real estate firm Corestate Capital has struck up a corporate deal to sell a stake in itself to a listed property company in order to expand its equity base.

Corestate Capital, the European private equity real estate firm, has struck a corporate deal with a listed property company of Switzerland that will see a stake sold in the company.

Zug-based Corestate, which was founded in 2006 and has invested in more than €2 billion of deals, has agreed to sell a stake to Intershop Holding, which has a portfolio of CHF 1 billion (€800 million; $1 billion) in markets such as Zurich, Berne and Geneva.

News of the transaction could be announced this coming week when Corestate is expected to say Intershop Holding has agreed a €20 million “capital increase” as well as the purchase of the existing shares and participation certificates.

Ralph Winter, founder of Corestate Capital, said: “The expansion of our equity base is a sign for the consistent implementation of our growth strategy. Looking forward, the Corestate Group will in addition to its opportunistic approach also focus on core investments and those generating value-add returns. In Intershop Holding AG, we have now gained an institutional partner who wishes to join us in realising opportunities of the German real estate market.”

Corestate has not yet said what stake has been sold or any other terms of the deal, other than to say that Intershop Holding is one of the oldest real estate companies listed on the SIX Swiss Exchange. The company’s investment activities focus on commercial properties with development potential.

In a statement the firms said: “With this new participation Intershop, seated in Zurich, will exploit (and) take part in the lucrative growth opportunities of Germany’s real estate market on which the Corestate Group has concentrated since its founding in 2006.”

Corestate Capital manages two closed ended funds: Corestate German Residential launched in 2006 which invests in small to medium sized residential portfolios, and the Corestate German Commercial Properties Fund launched in December 2007.

Sources said that Corestate had recently been asked by investors in the Corestate German Commercial Properties Fund to transfer the management of that fund to a third party for reasons that have not been made public.

Corestate has been focussing its investment activity of late on club-type deals drawing on various financial partners to buy property.

It is understood that Ralf Nocker, managing director at the firm who joined in 2009 and has responsibilities for the commercial property fund, is leaving the group.

In April this year, it also emerged that chief executive officer Phillip Burns was parting ways with the company.

Most recently, the firm announced it had hired Steffen Ricken from IVG Institutional Funds to become managing director and head of global capital raising.

His responsibilities include raising capital for joint ventures and club deals as well as other institutional products, Corestate said. The firm has been looking to extend its investor network of late and, in April, it opened its first office in Asia – in Singapore – with a view to increasing the amount of Asian capital it has to deploy in its European markets.

Also in June, the firm announced the launch of property management firm, CAPERA Immobilien Service, whose first mandate is the management of 14,000 German commercial and residential units owned by Corestate.