Deka buys into London office debt

The German CRE debt-focused fund manager has followed its recent investment in New York’s Empire State Building with a similar investment in London.

Frankfurt-based private debt fund Deka Realkredit Klassik has acquired a senior tranche of commercial real estate loans from DekaBank worth approximately £17 million. The loans are part of a £33 million debt financing package underpinning a London-based office property, the firm said in a statement.

The building was constructed in 1995 and has undergone a process of modernisation in recent years. It has a footprint of 14,000 square metres.  

Deka  Realkredit Klassik has been buying up debt in prime overseas real estate, and earlier this year bought into a senior tranche financing New York’s Empire State Building. Its $20 million investment was part of a $500 million financing package arranged by the firm’s parent DekaBank and HSBC alongside two US banks.  

The German firm launched in 2009 as the first debt fund to operate under German investment law. Its strategy is to acquire senior debt positions in existing commercial real estate. For each prior-ranking tranche it acquires, the firm commits to hold a junior tranche equating to a minimum of 50 percent of the fund’s fraction until repayment of the loan, it said.  

The firm currently has €370 million in assets under management.