Adler acquires 700 apartment´s in Berlin

Adler Real Estate has acquired a majority stake in the ‘Wasserstadt Mitte’ development comprising around 700 apartments in Berlin for €120m.

Wasserstadt Mitte totals 44,000 sqm of apartments and around 5,200 sqm of office and retail space. The project, which is being developed by London-based Benson Elliot Capital Management, on behalf of Benson Elliot Real Estate Partners IV,and KauriCAB Development Berlin, is due to be completed by the end of 2019. It is expected to be home to around 1,400 residents.

The residential-led mixed use project fronting the Spandauer Schifffahrtskanal (Spree Canal) in central Berlin forms part of the Europacity project, which has transformed 40 hectares to the north of Berlin’s main railway station – an area which lay derelict for decades – into a new, mixed-use city quarter. The area is located a short walk from the Bundestag, various federal ministries, the Charité (Europe’s biggest university hospital) and Humboldt University.

Europacity has become a magnet for large office users, hotels, retailers and cultural facilities, including the well-known Hamburger Bahnhof – Museum für Gegenwart. With over two hectares devoted to parks and a kilometre of waterfront along the Spandauer Schifffahrtskanal, Europacity is becoming home to some of Berlin’s most desirable housing.

Following the acquisition, Adler will hold 94.9% of Wasserstadt Mitte, with a subsidiary holding the remaining stake. Adler will transfer €120m to project development firms during the construction phase. The project is expected to be valued at around €385m upon completion, generating an annual rent of €11m.

‘We made a conscious decision to focus on Berlin a while ago because we like its dynamics and how it has matured as a capital city, which has created a favourable real estate environment,’ Joseph DeLeo, a senior partner at Benson Elliot in London, told REFIRE. ‘Our focus in Berlin is on residential and offices and we’re looking at investment in hotels as well. One of the biggest challenges in the residential space is how to work through the affordable housing aspect. Securing construction also continues to be a challenge. These are the main headwinds that we’re mindful of. But if you can secure well-located sites, there are good opportunities.’

Benson Elliot started investing in Berlin’s residential sector in 2010, drawn by its economic population and rental growth, according to DeLeo: ‘Wasserstadt Mitte was our most ambitious Berlin residential project, but one we felt confident taking forward given the unique waterfront location and the secure outlook for rental housing in the city,’ he said. ‘Having taken the project through the planning and pre-development phases, it was an opportune moment to identify a long-term owner. We look forward to working with both KauriCAB and Adler to deliver this landmark contribution to Europacity’s renewal and Berlin’s continuing growth.’

Hagen Kahmann, a managing partner at KauriCAB Development, said his firm was ‘pleased to have been involved in shaping a regeneration project that will have an influence on the city for years to come, both in terms of meeting its growing housing needs and in delivering a new quarter with high quality architectural design to further enrich the capital’s international appeal’.

Adler could not be reached for comment. Benson Elliot was advised by Greenberg Traurig.