HIG Capital is set to inject €50m ($55m) into Berlin-based property developer Ziegert, marking one of the first significant deals in the sector since a downturn driven by rising construction costs and reduced demand, according to a report by Bloomberg.
The report cites unnamed sources familiar with the matter as revealing that structured financing arrangement allows HIG to convert its debt into an equity stake exceeding 25% under specific conditions.
Germany’s property market has faced significant challenges in recent months, as the era of low-interest rates came to an end, pushing numerous developers into insolvency or debt restructuring. While some investors have acquired distressed property assets, investments in financially stable companies like Ziegert have been rare.
The deal signals that HIG sees potential in certain segments of the German residential market, identifying them as attractive investment opportunities. The funding will enable Ziegert to capitalise on current market price distortions and pursue opportunities that would otherwise be challenging to execute.
