Corestate’s Winter: ‘Now we have a currency’

Shares in Luxembourg-based real estate investment manager Corestate Capital started to trade yesterday enabling the firm to add a second means of fundraising and to ‘warehouse’ investments, the firm’s co-founder told PERE.

Corestate Capital, the Luxembourg-based real estate investment management firm, will be better placed to tackle the current market environment and to pursue its deal pipeline following its listing on the Frankfurt Stock Exchange, the firm’s co-founder Ralph Winter said yesterday.

Speaking to PERE on the firm’s shares’ first day of trading, and at the annual EXPO Real property conference in Munich, Winter explained that the float of an approximately 20 percent stake in the company was aimed at adding a second means of raising capital to traditional private placements, and to buy assets using balance sheet capital.

On the latter reason, he said Corestate would use the balance sheet to better compete in today’s hotly contested markets, buying assets before syndicating down investments across its approximately 100-strong investor base. He described the approach as ‘warehousing’ assets.

“Now we have a currency,” he said of the listing.

“We can now warehouse investments which means we can take on bigger portfolios. We take 100 percent of the risk onto our balance sheet and then syndicate to third parties. Of course, we’ll only do this when we are clear who the investors for each deal are.”

Corestate’s investors traditionally have been a mix of institutional and high net worth investors.

Winter said the listing would also offer its investors a greater alignment of interest as more of its resources would be used than in the past. The listing was originally planned for last year but the firm did not proceed citing unfavorable market conditions. Since then, demand for listed real estate has increased, giving Corestate the confidence to return to the public markets. Winter confirmed that future share issuances were likely, with the next one happening within 12 months.

Shares started trading at a price of €17.40.

Since its founding in 2006, Corestate has completed more than €5.4 billion of transactions in Europe. It is currently predominantly focused on retail and housing markets in Germany and Austria.