Jacopo Mingazzini - CEO Estavis AG
Another listed German property shifting its strategy is the Berlin-based residential specialist Estavis AG. The group recently sold its last development site, a 7,860 sqm plot of land in Alt-Hohenschonhausen district of Berlin, reflecting the company’s new strategy, which is to focus solely on the acquisition and management of housing units.
In a deal financed by HSH Nordbank, the Estavis site was bought by project developer Townscape One for €22m. The plans call for a five-building residential complex with 10,300 sqm of floor space, and construction is due to start this month.
As part of the new realigned strategy, Estavis just recently bought 3,200 apartments in Berlin’s Hohenschonhausen district for a price of €110m, selling on 2,000 of the total with refurbishment needs to two further institutions. The remaining 1,200 modernised housing units were taken into Estavis stock so that after the resale, its effective purchase price for the units was €45.3m. With an annual rental income of about €4.2m, the purchase was made at a valuation of 11 times rental, Estavis said in a press statement. The seller of the apartment portfolio was Kristensen Berlin, part of the Denmark’s Kristensen Properties.
Estavis floated on the Frankfurt Stock Exchange in 2007, but really only developed ambitions after taking over the housing privatisation division of the now defunct Colonia Real Estate, when that company was absorbed into fellow-listed TAG Immobilien AG. (TAG’s CEO Rolf Elgeti is a supervisory board member at Estavis). The company strategy is to support investors by providing the management structure for developing portfolios valued at €15m upwards, buying at well below replacement cost and upgrading, and essentially preparing them in blocks of between 15 and 100 units for re-sale.
The latest acquisition fits fairly closely with this. According to Estavis’s CEO, Jacopo Mingazzini – who incidentally founded the privatisation company Accentro GmbH which Estavis took over for its re-selling activities – the purchase was an important new building block for the company.
“Due to the additional revenue earned in reselling the partly or completely un-renovated units, we were able to acquire our completely updated inventory at a price below the assessed market value. The positive cash flow deriving from the rental income right from the start will provide a very significant and stable future contribution to our group."
The currently low average rental price of €5.00 per sqm for the stock implies considerable scope for further gains in the coming years, he added. “With this acquisition, we have come one large step further toward our medium-term goal of expanding our own portfolio up to 10,000 apartments.”