03 Oct Union Investment commissions Deutsche Asset One to establish nationwide investment fund for German residential real estate
Union Investment commissions Deutsche Asset One to establish nationwide investment fund for German residential real estate
- Special fund to invest in existing and new residential developments across Germany
- Equity club deal involving German institutional investors
- Deutsche Asset One to handle investment and asset management duties
- Opening volume of 170 million euros / expansion planned
Deutsche Asset One, a Dupuis Investment- und Asset-Management company focusing on residential real estate in Germany, has been commissioned by Union Investment to set up an open-ended special investment fund investing in residential real estate across Germany. Union Investment and Deutsche Asset One have signed an outsourcing and consulting agreement, which hands over responsibility for investment and asset management for the portfolio to Deutsche Asset One. The fund is a special investment fund formed through a pure equity club deal with German institutional investors. The first investment tranche totals 170 million euros, with expansion planned after the investment of the initial capital commitments.
“We are delighted to continue our cooperation with Union Investment with this Germany-wide special investment fund assignment following the successful Residential Value focused on Berlin,” said Thilo von Stechow, Managing Partner of Deutsche Asset One. “Our market position and solid network open up attractive investment opportunities all over Germany and also enable us to manage a regionally diversified portfolio.”
The aim of the partnership is to set up a well-balanced residential real estate portfolio consisting of existing properties and new projects. As part of the portfolio strategy, investment funds will be split across A cities, B cities in metropolitan regions and selected C cities in Germany with particularly above-average spending power and anticipated population growth. “We already have investments worth hundreds of millions of euros in the pipeline which are currently undergoing due diligence checks,” von Stechow continues. “The mixture of cities and the combination of existing properties with new projects allows us to achieve a well-balanced portfolio structure with higher rent yields compared to a portfolio encompassing just new project investments or A cities. In addition, the value of these existing properties can be enhanced through proactive portfolio management. We are marrying potential for cash dividends with long-term value creation.”
“We chose Deutsche Asset One as our investment and asset management partner because we were so impressed by its performance in our Residential Value real estate fund partnership,” said Dr Christoph Schumacher, member of the Management Board of Union Investment Institutional Property GmbH. “What’s more, Deutsche Asset One Germany offers an outstanding network and holds an excellent position in investment and asset management in the residential sector. This, coupled with the necessary sourcing expertise, is the cornerstone of professional, value-oriented real estate fund management post-acquisition.”
“Despite the rise in real estate prices across the board, the residential investment market still offers long-term opportunities and should be a permanent presence in the real estate portfolio of any German institutional investor,” von Stechow added. Many major German cities are seeing an upturn in their economic development, which is reflected in a wide range of parameters. In a residential real estate report for Germany in 2016 published by CBRE and Vonovia, for instance, Berlin, Augsburg, Braunschweig, Hanover, Leipzig and Dortmund were all among the top ten in terms of rental growth. Leipzig, Berlin, Freiburg, Karlsruhe, Braunschweig and Dresden were all among the front-runners when it comes to the increase in employment rates, too. A number of cities have also seen their populations rise significantly over the past five years, including Leipzig, Augsburg, Freiburg and Mainz.
About Deutsche Asset One:
Deutsche Asset One is part of Dupuis Investment- und Asset Management and focuses on providing investment and asset management services geared towards the German residential real estate market. Deutsche Asset One has no product portfolio of its own, rather concentrates on building up and managing the residential real estate portfolios of national and international investors – from real estate investment companies to financial intermediaries. Financial intermediaries include insurers, pension funds, schemes and associations, as well as securities deposits and foundations. Deutsche Asset One is an independent, owner-managed investment and asset management company offering its clients end-to-end real estate portfolio management in the style of a boutique investment firm. Investment volume for the years 2016 to 2018 stands at approximately 500 million euros. Investment properties include project developments and existing real estate upwards of 3 million euros in value and as a portfolio with up to 2,000 residential units. Deutsche Asset One currently manages one real estate fund worth some 540 million euros.
About Union Investment
Union Investment is a leading real estate investment manager for private and institutional investors. Union Investment manages total assets of around EUR 30.4 billion in actively managed funds and approximately EUR 2.5 billion via administrative services. Established in 1965, Union Investment Real Estate GmbH is the private property investment specialist within the Union Investment Group. Its sister company, Union Investment Institutional Property GmbH, focuses on real estate investment for institutional customers. Within the commercial real estate sector, Union Investment is active as an institutional investor and asset manager. Covering over 24 national markets, its broadly diversified real estate portfolio comprises over 376 properties and projects in the office, hotel, retail and logigtics segments. Approximately 57 per cent of its real estate assets are located outside Germany, 15 per cent of which are also outside Europe.