CS Euroreal to be transferred to Commerzbank
The Credit Suisse real estate fund CS Euroreal goes to Commerzbank after five years of liquidation. The German bank is taking over the management mandate and is to sell the remaining properties in the portfolio.
According to the fund management, the majority of CS Euroreal's real estate portfolio has already been sold. Only recently, the largest fund property with a market value of 244.4 million euros, the "Le Befane" shopping center in Rimini, was sold to Union Investment. The company will contribute the center with 129 stores and 35,500 sqm of retail space to the UniImmo: Europa open-ended mutual real estate fund. In addition, the sale of two retail properties in Nuremberg and Berlin with a total market value of around 150 million euros, or two percent of the original portfolio, has already been contractually secured.
In total, Credit Suisse Asset Management has sold 74 properties for a total sales price of around four billion euros during the fund's five-year liquidation period. Since the suspension of redemptions was initiated, the sales total 89 properties for a total of around 5.3 billion. This corresponds to 82 percent of the original real estate portfolio. According to Credit Suisse, the net proceeds from the sales were roughly in line with the market values most recently determined by the independent appraisers. Now 23 properties with a market value of around one billion euros remain for further sale by Commerzbank.
Before Commerzbank takes over the further liquidation of CS Euroreal as custodian bank in accordance with the Investment Act, investors will receive an extraordinary special distribution of approximately EUR 650 million or EUR 6.20 for the euro share class and CHF 9.50 for the CHF share class on April 27, 2017.
CHF investors suffer from exchange rates
"Instead of liquidating the extensive real estate portfolio as quickly as possible, we have placed greater emphasis on achieving the best possible results. As a result of the gradual recovery of the real estate markets following the euro/sovereign debt crisis, we have significantly expanded our sales activities over the last three years. This has enabled us to achieve better investment results for investors in a challenging situation," says Karl-Josef Schneiders, Managing Director of Credit Suisse Asset Management Immobilien Kapitalanlagegesellschaft.
A total of EUR 3.2 billion has been paid out to investors to date. Including the extraordinary special distribution, investors in the euro share class have then received back around EUR 3.8 billion or EUR 36.80 per share for the euro share class and CHF 55.70 for the CHF share class. According to Credit Suisse, this corresponds to around two thirds of the respective unit value at the time the fund dissolution was initiated on May 21, 2012.
Long-term investors in the euro share class who purchased their fund units around nine years ago - i.e. around two years before the suspension of redemptions - have therefore not suffered any net losses to date. The CHF share class, on the other hand, has been more volatile due to exchange rate effects, according to CS.
