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Shore Capital, the independent investment group specialising in equity capital markets, principal finance and alternative asset management, announces the first close of Brandenburg Realty Limited and associated entities (“Brandenburg Realty” or the “Fund”) which has been established to invest in German residential real estate. Shore Capital has made a commitment of €12.5 million in Brandenburg Realty (the “Transaction”).

Brandenburg Realty’s primary focus is to acquire well-located, high quality residential buildings in major German cities, with a focus on Berlin, in order to exploit the sector’s strong growth potential in Europe’s largest economy.

The Fund’s first close has raised €135 million from institutional investors and family offices, predominantly from the United States, and includes a co-investment commitment of a maximum of €12.5 million from Puma Brandenburg Limited. Brandenburg Realty anticipates one further close within three months to raise maximum commitments of €250 million.

In executing Brandenburg Realty’s strategy, Shore Capital will be providing advisory services to the vehicle, through its wholly owned subsidiary Shore Capital International Limited, leveraging the expertise it developed since commencing activities in the German real estate market in 2005. Over the last decade, Shore Capital has advised on the acquisition and asset management of a German real estate portfolio which includes 3,000 apartments in Berlin; a number of commercial properties, including the 306 room, five-star Hyatt Hotel in Cologne; and 45 out-of-town retail units let to Lidl in various locations across Germany.

Brandenburg Realty will be advised by a newly established company, Realty Investment Advisors Limited (the “Investment Advisor”). It will pay to the Investment Advisor an annual fee equal to 1.75% of the net asset value of the vehicle. In addition, the Investment Advisor has appointed Shore Capital International Limited’s Berlin office as local advisor on the same commercial terms as in respect of the services supplied to Puma Brandenburg Limited in relation to its existing German real estate portfolio. 

Further, Brandenburg Realty Holdings LP (the “Carry Vehicle”) is entitled to receive carried interest payable by investors of Brandenburg Realty which is calculated at a rate of 20% of the net returns of Brandenburg Realty, subject to a hurdle rate of 8% per annum (compounded annually). 

Shore Capital has a 20% interest in both the Investment Advisor and the Carry Vehicle together with senior employees of Shore Capital, including Howard Shore, Executive Chairman, who is a substantial shareholder of Shore Capital and is also the majority shareholder of each of the Investment Advisor and Carry Vehicle. As such, the investment by Shore Capital of €12.5 million into Brandenburg Realty is treated as a Related Party transaction in accordance with AIM Rule 13. The directors of Shore Capital, excluding Howard Shore, consider, having consulted with its Nominated Adviser, that the terms of the Transaction are fair and reasonable insofar as the Company’s shareholders are concerned.

Commenting on the closing, Howard Shore, Executive Chairman, said:

“Brandenburg Realty will build on Puma Brandenburg’s successful track record in the German real estate sector developed over the past decade. With our team on the ground in Berlin, we are perfectly placed and have the in-house expertise to assist the new vehicle in executing its strategy to acquire well located, high quality residential buildings in major German cities. We are particularly delighted to be supporting Brandenburg Realty, together with a number of significant US institutional and family office investors.” 

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Enquiries:

 

Shore Capital  Howard Shore, Executive Chairman  Lynn Bruce, Director	+44 (0) 20 7468 7911  +44 (0) 1481 728 902
Grant Thornton UK LLP (Nominated Adviser)  Philip Secrett  Melanie Frean	+44 (0) 20 7383 5100
RBC Capital Markets (Broker)  Josh Critchley   Oliver Hearsey	+44 (0) 20 7653 4000
Bell Pottinger (Public Relations)  Olly Scott  Zoe Pocock	+44 (0) 20 3772 2500

 

 

About Shore Capital

Shore Capital is an AIM quoted independent investment group. Founded and owned by entrepreneurs, for three decades Shore Capital has been helping entrepreneurial businesses reach their full potential, find committed long term investors and develop into significant enterprises. The business offers innovative corporate advice; a leading market-making business; some of the most respected investment research available in the UK; and a diverse range of high quality investment opportunities, including its hugely successful VCTs and principal finance activities. It is a business founded on four simple values – integrity, drive, competence and trust. 

The Group is based in Guernsey, London, Liverpool, Edinburgh and Berlin. Shore Capital Stockbrokers Limited, Shore Capital and Corporate Limited, Shore Capital Limited and Puma Investment Management Limited are each authorised and regulated by the Financial Conduct Authority.  Shore Capital Stockbrokers Limited is a member of the London Stock Exchange.

www.shorecap.gg