Oaktree acquires €1.1bn German property portfolio

The distressed loan specialist and real estate investor is buying a portfolio of German properties as Europe’s largest economy continues to recover.

Oaktree Capital Management has agreed to buy a portfolio of German property for approximately €1.1 billion ($1.4 billion) from fund manager Deka.

Deka Immobilien Investment confirmed that it has signed a contract with a “bidder” to sell the so-called “Hercules” portfolio, although it refused to confirm the identity of the purchaser.

Earlier today the Financial Times Deutschland reported that Oaktree was the unnamed buyer, citing only banking sources.

The deal comes a day after German Economics Minister Michael Glos said he hoped Europe’s largest economy could grow by more than the official forecast of 1.6 percent this year.

The German economy grew 0.9 percent in the second quarter compared to the quarter before, its fastest pace in more than five years.

The properties being sold are owned by open ended funds via Deka’s ImmobilienFond, which exclusively invests in German real estate.

A spokesperson said the sale still needed approval from the supervisory board of Deka bank, adding that the package is being sold to “optimize the portfolio”.

The Financial Times Deutschland said four properties were swapped out of another portfolio called Hannibal which contained “problem properties” suffering low occupancy rates.

Los Angeles-based Oaktree, founded in 1995 by Howard Marks, Bruce Karsh, Sheldon Stone, Larry Keele, Richard Masson and Stephen Kaplan, is no stranger to property deals in Germany and is among a number of US distressed debt and real estate investors that set up offices in the country.

In February last year it bought a €1 billion portfolio of 21,000 residential units from Hamburg’s Landesbank HSH Nordbank.