Corestate doubles revenue, profit; boosts AUM by €1bn
The Frankfurt-listed Corestate Capital boosted its revenue to €125.8m in the first half of the year, while pushing group earnings up from €22.8m to €60.8m. Assets under management rose by more than €900m to about €22bn. The company has expanded massively since its IPO on the Frankfurt Stock Exchange in 2016, and has made a string of acquisitions which has catapulted its growth.
According to new CEO Michael Bütter, announcing the results, “We are pleased with the very good business development throughout the Group, especially at our subsidiaries Helvetic Financial Services (HFS) and Hannover Leasing, which will make sustainable and stable contributions to earnings following their acquisitions in 2017 with their specialized business models.”
Over the past 24 months, Corestate has expanded its product range to attract new investor groups, Bütter said. “Additional regulatory expenses burden the operating profitability of smaller asset managers, which opens up strategic acquisition opportunities for us. We will also use our extensive experience in micro living and serviced apartments for a new product line addressing decisive changes in urbanization, mobility and demographic change. We are internationalising both on the product side and on the operational level.”
Corestate has a 'comfortable' pipeline of potential transactions of around €5.7bn, he added. “Our strong product pipeline in conjunction with our broad customer base gives us a very positive outlook for the second half of the year.”
The company recently launched an investment programme for its club deal clients, focused on value-add retail, office and residential buildings in mid-sized European cities. The investment horizon is five years, and the target IRR is 16%. It is expected to have a volume of between €100m and €150m, and be structured as a Luxembourg-domiciled closed-end Reserved Alternative Investment Fund (RAIF), targeting private investors, family office and institutional investors with a focus on the German market. The fund is expected to close later this year.
According to Thomas Landschreiber, co-founder and CIO of Corestate, “We have identified not only more investor interest in the value-add segment, but also a host of asset opportunities for a manage-to-core strategy in mid-sized European cities. A lot of properties need refurbishment and modernisation in order to meet changing customer and tenant needs. The European value-add programme will benefit from these developments.”
The fund has already identified several seed assets, characterized by an existing high cash flow combined with vacancies, he said. “The short maturity, transparent structure and low minimum investment support the attractive investment case for multi-family offices and private banks in particular.”