Depreciated Asset
IGIS Asset Management is reportedly considering selling real estate in Germany to prevent additional deterioration of the profitability of a fund under its management.
According to financial sources on July 18, IGIS announced on their website on July 17 regarding the primary risk conditions and measures pertaining to the “IGIS Global Real Estate Investment Trust No. 229 (Derivative Type).”
The investment asset of this fund, the TRIANON office located in Germany, has experienced a significant blow to its profitability due to the primary tenant, DekaBank, not exercising its lease extension option. Consequently, the lease agreement is slated to expire on June 30, 2024.
As of the end of last year, this building’s value was confirmed to be 544 million euros (US$611 million), which is a considerable decrease of about 100 million euros compared to the time when the fund was established.
Previously, IGIS sought to enhance capital through domestic institutions to secure maintenance costs for new tenants. Up until now, marketing activities have been carried out with approximately 130 potential major shareholders. Among these, five have shown interest in refinancing through methods such as mezzanine loans.
In relation to this, IGIS commented, “We have been putting in our best efforts to secure additional capital through reviews related to the investment of our own funds and discussions with domestic institutional investors. However, due to recent domestic and international market conditions, smoothly mobilizing funds has proven to be challenging.”