Velero refinances residential portfolio to the tune of €377m

German residential specialist Velero, which was acquired almost a year ago by US private equity investor KKR, has refinanced its entire German residential real estate portfolio.

The €377 mln refinancing has been provided as a senior loan by Société Générale and has a maximum maturity of six years. All existing loans were repaid, resulting in a significant reduction in financing costs, according to the firm.

Jan Baumgart, head of real estate in Germany at KKR, commented: 'This refinancing will help unlock additional growth opportunities for Velero and we are already in the process of securing attractive add-on opportunities.'

Velero intends to use the additional funds from the new financing to make operational investments in its existing real estate portfolio, increase their attractiveness and improve energy performance.

The residential real estate platform currently manages a portfolio of around 7,500 residential units with a total rental area of approximately 450,000 m2.

The properties are mainly located in medium-sized cities in North Rhine-Westphalia, Saxony-Anhalt, Saxony and Brandenburg.

Sascha Giest, co-CEO at Velero, added: 'We have deep expertise in repositioning residential portfolios with the potential for optimization, and this refinancing provides us additional financial headroom to accelerate our investments in the quality of our portfolio and increase the quality of living for our tenants.'

FAP Finance lead the process and advised KKR and Velero on the structuring of the financing.


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