Asset and fund manager Prelios Group (previously known as Pirelli Real Estate) took the opportunity at the recent MIPIM in Cannes to re-affirm its commitment to keeping its German operations within the group, and not to hive them off in line with its recent retrenchment in the sector, and its own statements last year as to its German intentions. The company is Italy’s third-biggest property fund manager, and has recently received a sizeable capital injection from two Italian banks and a number of private investors.
The company’s new boss Sergio Iasi – who himself is one of the group’s new investors - stressed that the German unit would remain an integral part of the group. “Our business in Germany is running wonderfully”, he said. The company now also is reconsidering its plans to sell northern German residential property company DGAG Deutsche Grundvermögen AG with its 18,000 apartments, although it may bundle them into a special fund. “A portfolio of residential properties like this could definitely make an interesting investment for many international investors, so it might make sense to offer a suitable partner a long-term stake”, he commented.
Meanwhile, the private Berlin-based property investor Kronberg International, frequently associated on deals in the past with the old Pirelli Real Estate in Germany, paid €115m to buy a 52.8% majority stake in three residential and commercial portfolios in German, via an Amsterdam vehicle. The sellers were a group of Italian family offices, while the remaining 47% partner in the Dutch special vehicle remains a Prelios Netherlands subsidiary.
The deal increases Kronberg’s German residential holdings to about 6,000 units. The real-estate portfolios, which are divided amongst three regionally structured German property companies, comprise 1,791 residential units and 140 commercial units and are located in North-Rhine Westphalia (NRW), Saxony and Northern Germany. The 148 properties in NRW are located in Düsseldorf, Cologne and other cities in the Ruhr district; in Saxony at locations including Dresden, Leipzig and Chemnitz, and in northern Germany in the cities of Lübeck, Kiel and Rostock. Overall, the current levels of occupancy range from 85% for the NRW portfolio, 92% for the Saxony portfolio, and 95% for the northern Germany portfolio.
Kronberg, founded and run by CEO Martin Hellweger, focuses on property in Germany, Austria, France and Italy investing in single properties and stocks of real estate with development potential, either individually or along with international investment partners. These include Prelios, but also Austrian listed group conwert Immobilien and the Versorgungswerk der Ärztekammer für Steiermark, a southern Austrian doctorss’ occupational pension fund. Just last year, Kronberg teamed up with Deutsche Land and Jag Immobilien to buy a residential and commercial portfolio consisting of 37 properties and 1,200 apartments in and around Dresden in Saxony.